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2014 (1) TMI 1693 - ITAT JAIPUREligibility of deduction u/s 54F - LTCG V/S business income - Held that:- The assessee has treated this land as her asset and not stock in trade. When the entire evidence are examined in their entirety, the only one irresistible conclusion can be drawn that the assessee owned and possessed a piece of agricultural land as her ‘asset’ acquired for investment and it was sold as an agricultural land. It is found that only because there is some mistake committed by the auditor the nature of the land would not change. It is also clearly established from record that she has sold agricultural piece of land which is exempt u/s 2(14)(iii) of the Act. Accordingly, we hold that the income arising from transaction of sale of agricultural land to the tune of ₹ 76,16,000/- is not a business income and it is simply receipt arising from sale of agricultural piece of land. Accordingly, we order to delete the impugned addition. In view of the our above finding, the claim of deduction u/s 54F of the Act would be of only of academic interest. This land cannot be treated as a capital asset u/s 2(14) of the Act. This receipt in fact is to be treated as long term capital gains having arisen from sale of land and not as a business income. Trading addition - bogus purchases - Held that:- The books of account of the assessee were rejected and provision of Section 145(3) of the Act was invoked. Thereafter, the AO estimated the profit @ 25% of the alleged purchases. This addition has been reduced by the ld. CIT(A) after relying on past history of the assessee. It is settled principle of law that after rejection of books of account past history of the assessee, if available, is the best guide. Accordingly, we do not find any fallacy in his finding and confirm the same.
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