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2016 (8) TMI 81 - AT - Income TaxNature of income - gains on sale of lands - business income or agriculture income - Held that:- The mere sale of few pieces of lands here and there, now and then, irrespective of their value, as long as the said assets/lands did not lose the basic character of agricultural lands, does not constitute business activity for the assessee. Apart from this, the VAO has furnished certificate, which indicates that the land under reference are agricultural land and there was no evidence to show that the assessee has changed the land for non-agricultural purpose. Therefore, the land held and sold by the assessee were certified and proved as agricultural land and agricultural incomes are offered on such lands, year after year, and the same is not disputed by the Assessing Officer. However, the main contention of the Assessing Officer that there was a disproportionate quantum of agricultural income compared to the value of the agricultural lands from which agricultural income was raised is not an appropriate basis to come to a conclusion that such lands are not agricultural land. Therefore, we find no force in the argument of the ld. DR that the assessee has not shown any agricultural activities. Moreover, the ld. CIT(A) has relied on various decisions and came to a right conclusion that the addition on account of treating the amount of ₹.3,04,01,161/-, which is the margin/gains to the assessee on sale of lands, as business income is not sustainable, since the lands under reference were held to be agricultural lands, and the activities of purchase and sale of such agricultural land, in our opinion did not constitute business. Thus, we find no reason to interfere with the order passed by the ld. CIT(A) - Decided against revenue
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