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2010 (12) TMI 281 - AT - Income TaxCapital Assets or Adventure in the nature of trade - AOP - co-ownership of property - Held that: that there is no written agreement amongst the parties to form an association of person to purchase the land, convert into residential plot and then sell it. No tangible evidence is available to establish any such intention that AOP has been formed. Merely because inherited ancestral land found in different name of family members would be wholly inferential/assumption. In our view therefore it would be too sweeping a conclusion to make that only because some persons have inherited agricultural land they have thereby formed an association of persons. - In view of the case of Smt Jaswant Kaur Sehgal v. CIT (2004 -TMI - 10858 - GAUHATI High Court), held that there was no AOP Re assessment - Notice u/s 148 - Held that: - the AO's jurisdiction to reopen an assessment u/s 147 of the Act would depend upon the issuance of a valid notice. It the notice issued by him is invalid for any reason then the entire proceedings that would be taken by him pursuant to such notice would be void for want of jurisdiction. - From the notice in this case it cannot be ascertained who is the assessee. Further, it cannot be ascertained whether the service is being effected as prescribed by s. 282 of the Act on the persons addressed in their capacity a principal officers or members of an association. No doubt, the words others appear in the body of the notice but there is nothing in the notice by which the assessees can be connected with this association. Lastly, from the language of the notice it is also not clear whether the association is sought to be assessed or the addressees. If it is presumed that it is the association which was sought to be assessed, there is no indication in the notice as to the particular item of business or activity regarding which the fresh assessment was sought to be made. - Notice is not in accordance with law and therefore quashed. Nature of transaction - There is no evidence that the assessee has purchased the agriculture land at any rate which bears any comparison to its vast assets. Nor is there any evidence that the assessee has engaged in a series of sales of land or other property belonging to it. When the property was originally acquired in the form of ancestral and there was no intention to resale it at a profit. Sales of land have not been frequent feature of the assessee. If a land owner develop his land, expanded money on it, laid roads, converted the land in to house site with the view to get better prize for the land, eventually sold the plots for consideration yielding a surplus, it could be hardly said that the transaction is anything more than a realization of a capital investment of conversion of one form of assets in to another. - such ancestral agriculture land can not be held as business assets - Decided in favor of assessee.
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