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2019 (1) TMI 693 - AT - Income TaxGain arising on the sale of land - to be taxed as ‘business income’ - intention of the assessee to procure the land for investment or to sale it at higher profit - physical proof regarding the agricultural nature of the land - Held that:- Transaction in sale of land as business transaction, is only on intention of the assessee not to keep the land as investment but to acquire the same, clear encumbrances and sell the same at higher profit which therefore, is business motive of the assessee. It is also asserted by the CIT(Appeal) that the land sold to Manhar Resort Pvt. Ltd and therefore, the land was not in the nature of investment but for business motive transaction. Nothing in coming out from the order of CIT(Appeal) wherein he has brought out any specific reasons regarding statement made in the order. There is no enquiry or factual verification done by the Ld. CIT(Appeal) to ascertain the nature and character of land and whether it could be called as agricultural land in terms of continuous agricultural activities, if at all undertaken. Similarly, the Ld. AR of the assessee submitted that even at present the land is used for agricultural purposes and all throughout, they have shown it as investment in their books of account and agricultural income is also shown in the return of income. We had put a question to the AR whether they have any physical proof regarding the agricultural nature of the land and that as on date whether still it is agricultural land. To which, Ld. AR stated as instructed by the assessee, it is still agricultural land and there is no construction of resort or anything like that on the said land. We find that the power of the Ld. CIT(Appeal) is coterminous with that of the AO. CIT(Appeal) should have called for Inspector’s report after sending Inspector for spot verification and taking details about the land. It should come out from facts on record that continuously agricultural activities were carried on the said land and if revenue is having doubt it should bring evidences on record. Similarly specific verification needs to be conducted to verify whether actual intention of the assessee was to procure the land for investment or to sale it at higher profit. These things are not clear from the order of CIT(Appeal). Therefore, the issue requires detailed verification - restore the matter to the file of Assessing Officer to make detailed verification and re-adjudicate the matter after providing reasonable opportunity of hearing to the assessee. - Decided in favour of assessee for statistical purposes.
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