TMI Blog2019 (1) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... at all undertaken. Similarly, the Ld. AR of the assessee submitted that even at present the land is used for agricultural purposes and all throughout, they have shown it as investment in their books of account and agricultural income is also shown in the return of income. We had put a question to the AR whether they have any physical proof regarding the agricultural nature of the land and that as on date whether still it is agricultural land. To which, Ld. AR stated as instructed by the assessee, it is still agricultural land and there is no construction of resort or anything like that on the said land. We find that the power of the Ld. CIT(Appeal) is coterminous with that of the AO. CIT(Appeal) should have called for Inspector’s report after sending Inspector for spot verification and taking details about the land. It should come out from facts on record that continuously agricultural activities were carried on the said land and if revenue is having doubt it should bring evidences on record. Similarly specific verification needs to be conducted to verify whether actual intention of the assessee was to procure the land for investment or to sale it at higher profit. These th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the said land is subject to the Land Revenue by the State Government. Crops are grown on the land as can be seen from the 7/12 extract filed by assessee. In the return of income also, the assessee has shown substantial agricultural income in the relevant assessment year 2010- 11. The agricultural income shown by assessee is at ₹ 79,600/-. Regarding the contention that the said land is agricultural in nature, the assessee placed reliance on the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Siddharth J. Desai (1982) 10 Taxman 1 which plays guiding factors to be considered while determining the nature and character of the land. Another case relied on the issue is the ratio laid down by the Hon'ble Madras High Court in the case of Mrs. Shakunthala Vedachalam Vs. ACIT, 369 ITR 558 (Mad.). The second contention of the assessee is that land situated beyond 8 Kms. from local limits of Lonavala Municipal Corporation. In support of this contention, the assessee has placed reliance on the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Minguel Chandra Pais ANR, reported as 282 ITR 618. 5. The Ld. CIT(Appeal) on this issue analyze ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artner in the firm M/s. Shrihari Builders and Developers. ii) The land in question is in the foothills of Lohgarh Fort and is located in Forest Zone. iii) The assessee claims that as per 7/12 extract, the land is agricultural and has also derived income from the same but the facts prove otherwise as one Late Ganpat Gopal Baikar claimed that he was in possession of the agricultural land and he was cultivating the land. Ultimately the assessee and other co-owners had to arrive at settlement agreement which was registered on 24.07.2008 by giving ₹ 30,00,000/- to legal heir of Late Ganpat Gopal Baikar. This being so, no agricultural operation could have been' carried out by the assessee as the land was in adverse possession. iv) The Ld.CIT(Appeal) also held that the intention of the assessee was not to keep the land as investment but to acquire the same, clear the encumbrances and sell the same at higher profit which clearly highlights the business motive of the transaction. v) As per the final Regional plan of Pune Region, land in forest Zone can be permitted to be used for agricultural purposes. This proves that the land in question cannot be termed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actor as far as taxation of any amount is concerned as held by the Hon'ble Supreme Court of India in the case of Kedarnath Jute Mills, 82 ITR 363. 7. At the time of hearing, the Ld. AR of the assessee vehemently argued that all throughout in the books of account they have shown the land as agricultural land as investment, they have always offered for tax as agricultural income. That rice was grown exclusively on land and even at the present date also, there is no commercial activity that has been undertaken and it is still agricultural land. That it is already established, it is beyond 8 Kms. from municipal limits. On this assertion, it was prayed by the Ld. AR that land should be treated as investment. Since it is agricultural land, it cannot be charged to business income and that the sale of land is, therefore, not business transaction. That it is further submitted by the Ld. AR that the Revenue on hypothetical basis has stated that the assessee and the other co owners have purchased land to sale it later on higher profits and therefore, the motive was only business. This is purely hypothetical as there is nothing on records from Revenue side to prove such claims. 8. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have called for Inspector s report after sending Inspector for spot verification and taking details about the land. It should come out from facts on record that continuously agricultural activities were carried on the said land and if revenue is having doubt it should bring evidences on record. Similarly specific verification needs to be conducted to verify whether actual intention of the assessee was to procure the land for investment or to sale it at higher profit. These things are not clear from the order of Ld. CIT(Appeal). Therefore, the issue requires detailed verification. In view of the matter, we set aside the order of Ld. CIT(Appeal) and restore the matter to the file of Assessing Officer to make detailed verification and re-adjudicate the matter after providing reasonable opportunity of hearing to the assessee. Hence, grounds raised in ITA No. 1005/PUN/2015 are allowed for statistical purposes. 11. Since the facts are similar and issues are common in ITA No.1006/PUN/2015, the decision taken by us in ITA No.1005/PUN/2015 shall apply for ITA No.1006/PUN/2015 also and therefore herein we set aside the order of the Ld. CIT(Appeal) and restore the matter to the fil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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