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2019 (8) TMI 520 - AT - Income TaxNature of land sold - agriculture land - capital assets leads to capital gain OR business assets leads to business income - AO consider profits of on sale of land as non agriculture land sale and treated as business income - no agricultural income was shown by the assessee - HELD THAT:- It is an undisputed fact that the 7/12 extracts were provided to the Revenue Authorities wherein clearly it is stated that the land in question was agricultural land. Even, there is certificate from Deputy Director, Town Planning, Pune stating that at the time of transfer the lands were agricultural land. Similarly, in the Sale Deed itself it is clear that the lands in question were agricultural land. On the contrary, though the Revenue is taking the transaction as business income they have not brought in any evidence on record neither they have conducted any specific enquiry to show that it is business transaction. The Hon‟ble Jurisdictional High Court in CIT VERSUS DHABLE, BOBDE PAROSE, KALE, LUTE AND CHOUDHARI [1992 (9) TMI 45 - BOMBAY HIGH COURT] held that the onus of proving that the land formed part of the business assets of the assessee is on the Department and in the absence of any evidence to that effect the presumption will be that the land was held as a capital asset by the assessee and the income from transfer thereof was not income from business. - we set aside the order of the Ld. CIT(A) and direct the AO to delete the addition from the hands of the assessee on this issue Disallowance of development expenses at ad-hoc @ 10% - HELD THAT:- The assessee has provided all the details of development work that he has undertaken before the Revenue Authorities. The Revenue Authorities did not raise any doubt regarding development activities taken place. That on verification of the relevant documentary evidences, it was found that certain receipts were not available or they were sans any signature. The Revenue Authorities disallowed 10% of the expenses only on the ground that proper vouchers and documents were not maintained/signed and in order to prevent any leakages of revenue. Taking the totality of facts and circumstances into consideration, we are of the considered view that this 10% disallowance of the expenses is definitely on the higher side. To meet the ends of justice, we set aside the order of the Ld. CIT(A) and direct the AO to restrict the disallowance to ₹ 1,50,000/- under this head while providing appeal effect to this order.
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