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2018 (1) TMI 401 - HC - Income TaxSale of land - whether the sale consideration was liable to be treated as business income of the appellant under Section 28 or being the sale of an agricultural land, the appellant was entitled to be exempted from capital gains tax under Section 45? - Held that:- It is an undisputed fact that the appellant had purchased agricultural land on 16-08-2006 while he was still a Non-resident Indian and thereafter he did not do any agricultural operations on that land. After retaining it for about two years, he sold it to St.Antony's Timber Depot, Chevoor. In the meanwhile, he had also levelled the land by expending a sum of ₹ 1,75,000/-. Admittedly, he did not obtain the permission of the RBI under Section 47 of the Foreign Exchange Management (Acquisition & Transfer of Immovable Property in India) Act, 1999, which prohibits acquisition of agricultural land by an NRI. The fact that he had levelled the land and enhanced its saleability is also an indication of his intention to resell the land even when he purchased it. He had made huge profits consequent to the sale and therefore undoubtedly the transaction amounts to “adventure in the nature of trade”. The profit which he made out of this sale would therefore be chargeable to tax under the head “income from business”.
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