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2016 (8) TMI 1454 - ITAT NAGPURCharacterization of gain on land sold - nature of land sold - agricultural land or capital asset - HELD THAT:- Said property was purchased by the assessee on 25-03-2008 for a consideration of ₹ 31,50,000/-. Prior to this date on 10-03-2008 the assessee has received an advance payment of ₹ 5,00,000/- against the sale consideration of ₹ 60,00,000/- for the said property. This fact emerges from the sale deed itself. Assessee had entered into the transaction of sale even before execution of the purchase deed. This amply supports the Revenue’s contention that business intention of the assessee was very evident. As rightly noted by the CIT(Appeals) in this context it is important to note that eventually the sale consideration of ₹ 30 lacs was received by the assessee directly from the builders to whom the said land was eventually sold and who plotted the land and sold it in pieces. The assessee was one of the ‘witnesses’ who signed the sale deed when the land was sold to Rajendra Ramdas Dhore who had later sold 14 plots to one M/s United Builders and Developers for ₹ 15 lacs and 14 plots to Shri Sahebrao Wadekar for ₹ 15 lacs and the sale proceeds totalling ₹ 30 lacs were directly paid to the assessee by these two purchase parties. Further more the assessee has also made application for conversion of the said land for non agricultural land for residential purpose. Thus the assessee was aware of the purpose for which the entire transaction was being entered at the threshold. There is no evidence of any cultivation activity on the said land. The assessee has not disclosed any agricultural activity/income/expenditure on the said land. Rather the facts of the case clearly indicate that the assessee was in the process of converting the land into non agricultural land and he eventually sold for non agricultural activities. Hence agree with the conclusion of the learned CIT(Appeals) that the facts of the case that no agricultural operation being carried out in the said property, the efforts to convert the said land into non agricultural land, taking advance from the eventual purchaser even before the said property had been purchased and being aware all along that the said land will be used for plotting by builders clearly reflects the commercial and profit element in the purchase and sale of the said property. - Decided against assessee.
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