TMI Blog2012 (10) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the assessee from PUDA authorities in respect of the land sold, merely because the land is sold in small plots to persons who intended its residential use, does not change the nature of land sold in the hands of the assessee and its taxability. As assessed by ITAT that the said land was part of notified forest area where admittedly no other activities except agricultural, if allowed, could be carried out & the Girdawari of the landholdings of the assessee proves the stand of the assessee that it was agricultural land and also the notification issued for the urban usage/non-agricultural activities certifies that prior to its notification the said land was used for agricultural purposes. The land being registered in Land Revenue Rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gaon is agricultural land by ignoring the notification of the Governor to constitute a Nagar Panchayat Nayagaon on 12.9.2005 declaring the said land in the village as land for urban usage/non agricultural, especially when no cultivation activity has been undertaken by the assessee? 2. Briefly, the facts as narrated in the appeal may be noticed. Assessment was completed under section 143(3) of the Act on 29.12.2008, Annexure A.1 at income of Rs. 1,19,83,800/- against the returned income of Rs.1,14,46,382/-. The assessee declared total income of Rs. 1,14,46,382/- under the head 'Long Term Capital Gain' on sale of 64 kanals 15 marlas of land in Karoran Village of Nayagaon. During the assessment proceedings, the Assessing Officer noticed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d price, it would be a case of capital accretion outside the scope of profits resulting from an adventure in the nature of trade. On the other hand, where income accrues on realisation of investments consisting of purchase and resale, income accruing could be treated as adventure in the nature of trade. The cardinal question which would require to be answered would be whether purchaser was a trader and had purchased the commodity with the clear understanding that it was his usual trade or business or incidental to it. 5. It was noticed by the CIT(A) that the stand of the assessee was that the land purchased was meant for agricultural purpose and apart from this, it was being used as such. However, at no point, any site plan or provision f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, then there is no basis for holding the said land and as not agricultural land. We find support from the ratio laid down by the Chandigarh Bench of the Tribunal in DCIT v. A.P. Paper Mills Limited (supra). Accordingly, we hold that the nature of the land sold by the assessee as on the date of its sale was agricultural land, which was acquired by the assessee in the year 1995 and was sold during the year under consideration. 22. The said asset being held by the assessee cannot be said to be a business asset and its sale in small plots of land to different purchasers is not adventure in the nature of trade, in the absence of the assessee having floated the same or having developed its land for the purposes other than agricultural land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural land, unless it is proved otherwise. The department has not brought up any such material on the record by which it could be said that the criteria adopted by the Tribunal for determining the character of the agricultural land was wrong.' [Emphasis supplied] 23. In view thereof we hold that the gain arising on the sale of the aforesaid agricultural land cannot be taxed as income from business. 7. Learned counsel for the revenue was unable to show that the activity undertaken by the assessee was an adventure in the nature of trade. No error could be pointed out in the findings recorded by the CIT(A) and upheld by the Tribunal warranting interference by this Court. 8. No question of law much less substantial question of la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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