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2014 (4) TMI 1184 - AT - Income TaxSale of land - nature of land - whether it was a sale of agriculture land simplicitor or it was an adventure in the nature of trade? - whether the land was sold out of compulsion or out of free will? - Held that:- Judicial Member rightly observed that the land was actually cultivated throughout the period of holding by the assessee, which is evident from the fact that the agricultural income was offered for rate purpose and accepted by the Revenue. It is, therefore, difficult to appreciate the observation of the learned Accountant Member that the assessee did not take any active step to get returns from the land. The learned Accountant Member has given emphasis to the fact that the assessee sold the land within a short span out of free will. In my considered opinion whether the land was sold out of compulsion or out of free will, will not alter the character of the transaction. Every assessee would like to make profit on a transaction, given an opportunity. In the instant case the assessee purchased the land with standing crops but ultimately sold the land tempted by the offer made by the Vedic Village Developers Pvt. Ltd. but mere sale of land on a profit cannot be a factor to conclude that the intention of the assessee was to carry on an adventure in the nature of trade. In other words, the subsequent making of profit cannot be a decisive factor. Thus, taking a holistic view of the matter, it is of the view that the learned Judicial Member had correctly come to the conclusion that the transaction was not an adventure in the nature of trade. The learned Judicial Member rightly observed that the impugned land will not fall within the purview of capital asset, being the land situated beyond the prescribed municipal limits and thus the sale proceeds thereof are not assessable to tax. For the above reasons question No. 1 is answered accordingly.
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