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2014 (9) TMI 1263 - AT - Income TaxGain on sale of agricultural land - nature of land - business income or long term capital gains as exempt from tax - HELD THAT:- We are in agreement with the inference drawn by the lower authorities that assessee has failed to substantiate that any agricultural activity was genuinely carried out on the said land during the period it has been held by the assessee. Be that as it may, the aforesaid circumstances are enough to deduce that the motive of the assessee to acquire the land in question was not to undertake cultivation or any other agricultural operations on the said land. The aforesaid inference gets strengthened by the fact that other than the lands in question, there is no material to show that the assessee was holding agricultural lands in past for the purpose of undertaking agricultural activities. We are unable to accept the plea of the assessee that the intention of the assessee to purchase the impugned agricultural lands was to undertake agricultural operations. On the contrary, the manner in which assessee has undertaken acquisition of lands, which are adjacent to each other, by way of multiple acquisitions and thereafter sold the same on proximate dates to the buyer, who is also a land developer, tantamounts to undertaking a trading activity and therefore surplus on such sale is liable to be taxed as a business income. The factum of the assessee having bought and sold an agricultural land which does not fall within the definition of ‘capital assets’ in terms of section 2(14)(iii) of the Act does not mitigate the taxability of the surplus arising on its sale as business income because the facts and circumstances of the case show that assessee has indeed undertaken trading of agricultural lands. The activity of trading in agricultural lands as stock-in-trade definitely is assessable as business income. We are inclined to uphold the orders of the authorities below treating the surplus on sale of land at village Pusane as a business income. - Decided against assessee.
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