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2017 (4) TMI 395 - AT - Income TaxIncome accrued to the assessee from sale of land/plots - LTCG or capital gain - Held that:- Unable to agree with the contention of the AO as well as observations of the Ld. CIT(A) that the sale of land immediately after 5 months of diversion is an activity of adventure in the nature of trade and business because as per ratio laid down in the case of CIT vs. Suresh Chand Goyal (2007 (1) TMI 90 - MADHYA PRADESH HIGH COURT) as reproduced hereinabove. Section 2(13) of the Act, defines the word ‘business’ which includes any trade, commerce or manufacture or any other adventure or concerned in the nature of trade, commerce or manufacture. Their lordship clearly held that an isolated transactions or activity cannot be a part of business and to consider the question of business there must regular activity of purchasing and selling. In the present case there is no iota of evidence on the record to show that the assessee was regular in the business of purchase and sale of land or plots, therefore, conclusion drawn by the AO and uphold by the Ld. CIT(A) cannot be held as valid and sustainable as per provisions of the Act - Decided in favour of assessee Claim of deduction u/s 54F on account of investment in construction of residential house out of the long term capital gains from the sale of land - Held that:- the authorities below, after treating the income as business income of the assessee, preceded to frame assessment and the issue of exemption/deduction u/s 54F of the Act was not properly adjudicated by them. Since by the earlier part of this order, we have allowed ground no.1 of assessee and we have directed the AO to treat the income from sale of plots/land as long term capital gain. Therefore, consequently, the assessee is entitled to claim exemption u/s 54F of the Act, on the expenditure incurred for construction of residential house. However, since there is no adjudication either by the AO or by the Ld. CIT(A) on this issue requires proper examination and verification at the end of the AO. Therefore, the issue is restored to the file of the AO for reconsideration.
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