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2017 (5) TMI 1688 - AT - Income TaxTreatment of income from sale of agricultural land as exempted income - treating the part of income declared by the assessee from the said land as agricultural income - HELD THAT:- There is no dispute regarding the fact that the assessee acquired agricultural land. There is also no dispute that there was agricultural operation in this land before sale of this land. AO was of the opinion that the amount received on sale of this agricultural property is nothing but long term capital gains on transfer of such an agricultural land and the same was brought into income from business. In this case, the assessee held the land always as fixed asset and not at all converted into stock-in-trade. The character of the land in the hands of the assessee has not changed. There is no material on record in respect of this land to show that the assessee carried on activities of buying and selling of land in a systematic manner so as to justify the action of the AO in treating the activities of the assessee as adventure in the nature of trade. Whether a land is agricultural land or not is essentially a question of fact. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. We have to answer the question on a consideration of all of them, a process of evaluation and the inference has to be drawn on a cumulative consideration of all the relevant facts. It may be stated here that not all the factors or tests would be present or absent in any case and that in each case one or more of the factors may make appearance and that ultimate decision will have to be reached on a balanced consideration of the totality of the circumstances. The expression 'agricultural land' is not defined in the Act, and now, whether it is agricultural land or not has to be determined by using the tests or methods laid down by the Courts from time to time. Land in question cannot be considered as stock in trade in the hands of assessee or capital asset liable for taxable capital gains on its transfer. It is nothing but transfer of agricultural land in terms of Sec.2(14)(iii) r.w.s. 10(37) of the Act and transfer of that land cannot lead to taxable capital gains or income from business. Consequently, it is not liable for taxation. Once we have considered it as agricultural land, and agricultural income accepted by the CIT(Appeals) as agricultural income, it is to accepted as so. - Decided against revenue.
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