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2022 (4) TMI 1054 - AT - Income TaxRealignment of profits arising on sale of land parcels - surplus arising on sale of asset - ‘capital gains’ OR ‘business income’ - CIT-A granted relief by the CIT(A) with regard to realignment of profits arising on sale of land parcels under the head ‘capital gains’ as claimed by the assessee - contention of the assessee that mere conversion of land into NA cannot draw adverse inference to the declared intentions - HELD THAT:- The question whether the surplus arising on sale of asset is in the nature of capital receipt or a trading receipt is essentially a question of fact. CIT (A), in our view, has analysed the salient features of the transactions in its natural perspective and has come to a benign conclusion. The declared intentions are supportable by the facts and circumstances of the case and thus cannot be displaced in a light hearted manner merely to deny concessional benefits attributable to such gains. Noticeably, section 2(14) stipulates that property can be ‘capital asset’ even if connected with business of the assessee. Assessee is entitled in law to hold certain class of assets as capital assets even while he is dealing with the asset of similar type in business with idea of commercial exploitations. Thus, case built by the AO on the grounds of the assessee engaged in business as developer of land would not ipso facto vitiate the nature and character of land holdings declared in a particular manner. The CIT(A), in our view, has come to a rational conclusion having regard to the corroborative evidences placed and conduct of the assessee over a period of several years in the past. Long period of holding, utilization of own funds, near absence of any trading activity on land except conversion of land in question are amongst vital pointers to lend support the declared intentions of acquiring the land as capital investments. Having regard to totality of facts and circumstances existing in the case, we do not see any justifiable reason to diverge from the conclusion drawn in the first appellate order. - appeal of revenue is dismissed.
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