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2019 (12) TMI 969 - AT - Income TaxIncome from sale of land - Business income or capital gain - assessee in revised return of income has declared the gain on sale of land as ‘Capital Gains’, whereas, the stand of Revenue is that the gain on sale of land is assessable under the head ‘Income from business’ - HELD THAT:- The sequence of events and the documents available on record fairly indicates that the intention of assessee was not to engage in the business of trading in subject land. It was standalone transaction carried out by the assessee. The contention of the Revenue that in the original return of income the assessee had declared gain arising from sale of land as business income and it was in the revised return that the assessee declared the gain from sale of land was an afterthought, is not sustainable. The provisions of the Act has granted liberty to the assessee to revise the returns with the object of removing any mistakes / errors in the computation of income or head of income. If the assessee in the original return of income has inadvertently mentioned the head of income as business income, it does not mean that it becomes sacrosanct and the assessee cannot change the head of income in the revised return. Taking into consideration the entirety of the facts, we are of the considered view that the transaction of sale of agricultural land by the assessee is not adventure in the nature of trade. The gain arising from sale of land is assessable under the head ‘Capital Gains’. Disallowance of cost of improvement over the land - HELD THAT:- Though the voluminous paper book filed before the Tribunal by the assessee, the ld. AR has certified that all the details were available before the AO, however, it is not clearly emanating from records whether the expenditure claimed by the assessee ₹ 3.74 crores was part of expenditure already allowed by the AO. Since, there is ambiguity on facts on this issue, we deem it appropriate to restore this issue back to the file of AO for re-examination. The assessee is directed to furnish relevant details of expenditure before the AO and also clarify whether expenditure of ₹ 3.74 crores is part of the expenditure already allowed by the AO. The AO shall decide this issue de novo after affording reasonable opportunity of hearing to the assessee, in accordance with law.
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