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2012 (10) TMI 250 - HC - Income TaxAgricultural land - income on sale of said land consisting of carved out plots - Long Term Capital Gain v/s income from business and profession - Held that:- The said asset being held by the assessee cannot be said to be a business asset and its sale in small plots of land to different purchasers is not adventure in the nature of trade, in the absence of the assessee having floated the same or having developed its land for the purposes other than agricultural land. Further for converting the usage, prior permission is required from the authorities and in the absence of any permission being obtained by the assessee from PUDA authorities in respect of the land sold, merely because the land is sold in small plots to persons who intended its residential use, does not change the nature of land sold in the hands of the assessee and its taxability. As assessed by ITAT that the said land was part of notified forest area where admittedly no other activities except agricultural, if allowed, could be carried out & the Girdawari of the landholdings of the assessee proves the stand of the assessee that it was agricultural land and also the notification issued for the urban usage/non-agricultural activities certifies that prior to its notification the said land was used for agricultural purposes. The land being registered in Land Revenue Records as Agricultural land, then there is no basis for holding the said land and as not agricultural land. The gain arising on the sale of the aforesaid agricultural land cannot be taxed as income from business as revenue was unable to show that the activity undertaken by the assessee was an adventure in the nature of trade - in favour of assessee.
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