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2012 (9) TMI 294 - AT - Income TaxProfit on sale of agricultural land - income from business OR capital gain - Held that:- The main object clause suggests that the assessee's main business is to deal in real estate and the assessee carried on the activity of buying and selling of lands and in each case the land was not subjected to cultivation by the assessee - the argument of the assessee on an assumption the land is fit for agriculture and was used for agriculture purpose by somebody on behalf of the assessee is not acceptable as it is on record that there is a series of transactions by which the assessee bought the land and sold for profit. The land purchased by the assessee in the present case is subject matter of trade and it has purchased at regular intervals and it cannot be considered as investment activity of the assessee. Even after purchasing the agricultural land, the assessee cannot be said to be carrying on any agricultural operation. There were no activities connected with the land. Though the assessee taken a plea that the land was leased for agricultural operations, the evidence brought on record does not suggest that the agricultural operation was actually carried on the said land. Though the assessee shown the land as an investment in the Balance Sheet it cannot change the character of land as stock-in-trade. The entry in the books of account is not conclusive to hold that the assessee has not dealt with in land. The facts of case suggest that the assessee with a sole motive of dealing in land acquired the land and sold the same which can be nothing but adventure in the nature of trade and that the land dealt by the assessee is a stock-in-trade. Unable to appreciate this contention of the assessee that AO accepted the income arising out of sale of such land as income from agriculture in earlier year as each assessment year is a separate unit of assessment and principles of res judicata did not apply to the income-tax proceedings - against assessee.
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