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2020 (2) TMI 1275 - AT - Income TaxCharacterization of income - profit from sale of land - conversion of agricultural land into non-agricultural land - same land was plotted and entered into agreement with REHWS on 13/08/2012 and sold the same - HELD THAT:- Intention of the assessee is to make profit out of the transaction, therefore entire activity carried by the assessee i.e. purchasing the agricultural land converting into non-agriculture and plotted the same and sold the plots to the REHWS is the activity ‘adventure in the nature of trade’, therefore it has to be treated as business income and not capital gains. The ld. CIT(A) by following the judgment of the Hon'ble Supreme Court in the case of G.Venkataswamy Naidu & Co. Vs. CIT [1958 (11) TMI 5 - SUPREME COURT] came to a conclusion that what is the intention of the assessee has to be seen to decide whether transaction is ‘adventure in the nature of trade or not. The ld. CIT(A) by considering the principles laid down by the Hon'ble Supreme Court in the above referred to judgment, in my opinion, he came to a correct conclusion that the activity carried by the assessee in the present case is ‘adventure in the nature of trade’ for the reason that from the beginning assessee’s intention is to make profit out of the sale transaction and not to hold it. Assessee’s intention is only to make profit out of the transaction, therefore in my opinion, ld. CIT(A) correctly decided that the activity carried by the assessee is ‘adventure in the nature of trade’, therefore find no reason to interfere with the order passed by the ld. CIT(A). So far as the development undertaken by the REHWS is concerned, it is not a material fact. The material fact in this case is only intention of the assessee, therefore, find no force in the argument of the ld.AR, therefore same is rejected. Thus, this appeal filed by the assessee is dismissed.
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