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2018 (2) TMI 1630 - AT - Income TaxGain from the sale of “Race Course” plots - LTCG or busniss income - Held that:- There is nothing more than the activity of dividing the plots in smaller sized units which has led the Assessing Officer to believe that the assessee was carrying on an adventure in the nature of trade. What he has overlooked is a whole bunch of factors which reasonably demonstrate that not only that the assessee was never engaged in the business of dividing the large plots of land into smaller end use units, but also that what was sold by the assessee was the land possessed by the assessee for a long period of time. Due to a fundamental change in the use of land in the areas concerned, over the long period during which the assessee held the land, the sellable standard unit size had indeed considerably come down, and, in order to get the market price for land, he had to essentially divide the land holding into plot size for which there is end user market While it may have been common to buy the land in the size that the assessee did in 60s as the use of land was agricultural at that point of time, with the passage of time, rapid urbanization and this land now being in the residential area, where smaller sized plots were required by the end users, the assessee had no choice but to sell the land plots in smaller size to get the market price. It was clearly a one off activity for the assessee as the assessee did not go beyond selling what he already held for the long years, and even the sale consideration was not ploughed back in land investments. We have also noticed that all along the gains on the sale of these plots was treated as capital gains, and, beyond any dispute or controversy, these lands were held as capital gains. CIT-A directing the Assessing Officer to reduce the income under the head “income from other sources” - Held that:- The relief granted by the CIT(A) is on account of duality of disallowance in the sense the disallowance deleted was unwarranted as the same was already accounted for the in the figure of income from other sources, which was taken by the Assessing Officer at ₹ 2,42,073 as against the actual figure of ₹ 2,26,583. The impugned disallowance was thus clearly a double disallowance. Learned Departmental Representative could not bring on record any material to dislodge these well reasoned findings of the CIT(A). We approve the conclusions arrived at by the learned CIT(A) on this point as well, and decline to interfere in the matter.
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