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2015 (12) TMI 1871 - AT - Income TaxGain on sale of agricultural lands - Nature of land sold - taxable as business income OR was exempt from tax - Whether CIT(A) failed to appreciate that the lands sold in this year were capital asset of the firm and since the said lands were agricultural lands and beyond 8 kms from the municipal limits, the gain arising on sale of lands was exempt from tax? - HELD THAT:- The assessee is a partnership firm and the main activity in which the assessee is engaged is in dealing the lands. The factual finding of the CIT(A) in this regard is that the assessee had owned various lands, which have been declared in the balance sheet under the ‘list of Sundry Debtors related with land transactions – Scheme – VII’ starting from assessment year 2003-04 and then in assessment year 2004-05. During the year under consideration, there is certain movement in the lands and two of the lands have been sold by the assessee. In view of the large number of transactions carried out by the assessee in lands reflect the nature of assessee to carry on the business of sale and purchase of lands, where the lands purchased by it were shown as stock-in-trade. The nature of the lands purchased by the assessee is claimed to be agricultural lands. No iota of evidence has been filed by the assessee to establish that any agricultural activity was carried on the aforesaid lands. Further, even 7/12 extract filed by the assessee reflects no agricultural activity. In view of the above said facts and circumstances, where the assessee is admittedly engaged in the business of purchase and sale of lands and in view of the assessee having declared the said lands as part of its current assets, we find no merit in the plea of the assessee in this regard and dismissing the same, we uphold the orders of authorities below in treating the profit on sale of land as business income in the hands of the assessee. The grounds of appeal raised by the assessee are thus, dismissed.
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