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2018 (5) TMI 2132 - AT - Income TaxCorrect head of income - taxability of profits earned on sale of land - Capital gain or business income - assessee’s contention that profits are exempt from tax as the land is agriculture land whereas the Revenue’s stand is that the sale of land is adventure in the nature of trade and therefore business income - HELD THAT:- It is an undisputed fact that assessee along with 6 co-owners had purchased land at Dahegaon, which is located beyond 8 kms from any Municipality and the same was sold during the year under consideration. The disclosure of the land in assessee’s balance sheet as investments is not in dispute. The Submission of the assessee that the land has been classified in the Revenue records as agricultural land, no permission from the concerned authorities has been obtained for transfer for nonagricultural use, no plotting/sub plotting of the land has been undertaken by the assessee has not been controverted by Revenue. Submission of the assessee that the produce from the sale of cultivation was disclosed by the assessee, that the assessee wanted to start horticulture activities and for which the assessee had approached bank for financial assistance has not been proved to be false. We further find that the assessee’s contention of having satisfied of the various parameters spelt out by Hon’ble Apex Court in the case Sarifabibi [1993 (9) TMI 10 - SUPREME COURT] to hold the land as agricultural land has been met and the contention of the assessee has not been found to be incorrect. We find that in the case of CIT Vs. Dhable, Bobde and others [1992 (9) TMI 45 - BOMBAY HIGH COURT] assessee, an association of persons, had purchased agricultural land in October, 1966 and sold in January, 1967 and had claimed it to be exempt. Revenue treated the transaction to be on adventure in the nature of trade and held it as taxable business come. The Hon’ble High Court while deciding the issue in favour of assessee has held that the onus of proving that the land formed part of business asset of the assessee was on Revenue and in the absence of evidence to that effect, the presumption was that land was held as capital asset and therefore income on its transfer was not income from business. was held as capital asset and therefore income on its transfer was not income from business. Before us, Revenue has not placed any material to prove that the land formed part of business asset of the assessee. Further the contentions of the Ld AR have not been controverted by Revenue. In such a situation, we are of the view that the ratio of the decision in the case of Dhoble, Bobde and others (supra) would be applicable to the present case. We therefore after relying on the various decisions cited by the assessee, are of the view that the AO and Ld.CIT(A) were not justified in treating the profits from sale of land as business income. We therefore set aside the order of Ld.CIT(A) and thus the ground of the assessee are allowed.
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