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TMI Blog2012 (11) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee which is not correct and not justified. 2. the assessee has sold the agricultural land of which he is having a GPA and being agricultural land the same is excluded from the definition of capital asset u/s. 2(14) of the Income-tax Act, 1961. Hence the same is exempted under the provisions of the Incometax Act, 1961 and the same cannot be taxable in the hands of the assessee for the A.Y. 20070-08. 3. The agricultural land is not located in the municipal areas and the same is entitled for the exemption as gains from sale of agricultural land is exempted under the provisions of the Income-tax Act, 1961. 4. The copies of agricultural land certificate and Distance Certificate issued by Executive Engineer submitted at the time of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has considered the income as income from the business of sale of land and not as agricultural land and has added the amount which has been disallowed under the provisions of business income which is not correct and not justified. 9. We would like to submit that the assessee has only earned commission income while facilitating the sale of above mentioned agricultural lands. The same income has been reflecting in the Profit and Loss account submitted during the proceedings before the Hon'ble Commissioner of Income-tax (Appeals) vide paper book No. 1 as additional evidence on 18.1.2011. The said profit and loss account has not been considered at all which is not correct, not justified and bad in law. 10. As earlier profit and loss acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... development expenditure which is not correct and not justified as the additions made is without any basis or without having any documents on the basis of which the additions/ disallowance can be made. 15. the Assessing Officer has added the amount of Rs. 18,36,635/- on ad-hoc basis being 50% of the other expenses which has been restricted to 30% of other expenses which comes to Rs. 11,01,980 by Hon'ble CIT(A) which is not correct, not justified and bad in law. The amount has been added without any basis and without having any document on the basis of which the additions;/disallowance can be made. 16. The Assessing Officer has added the amount of Rs. 10,00,000/- towards the agricultural income from other sources which is not correct, not j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) have considered only three sale deeds, the total consideration of which were Rs. 4,07,000/- and the balance purchases has been disallowed for want of supporting and added back to the income. The assessee has entered into a agreement with GPA holders of the land for the value claimed in the profit and loss account and registered the property for guidance value directly from the sellers. It is the common business practice in real estate business that sale and purchases would happen by way of GPA though middlemen's and the holder of land will execute sale deeds. The assessee being a businessman entered into transaction with GPA holders and paid the purchase price to the GPA holders and debited the entire purchase consideration paid towards p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sales cannot be made. It is the well established position that on money payment will always there in real estate transactions and it is the common practice in the trade. The AO only disallowed the purchases not supported by valid sale deed and at the same time failed to do so in case of sales. When the AO not considered the purchases not supported by sale deed he should have ignore the sales not supported by deeds. The AO is not correct in just disallowing the purchases and treated entire sales as assessee income. No business has so much profit as computed by the AO. The assessee has debited all the amounts paid for purchases and credited all the sales too. The Assessing Officer was of the view that purchases are not supported by proper d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be appropriate and accordingly, we direct the AO to adopt 15% net profit on sales and compute the profit from business. Accordingly we allow this ground in favour of assessee. 10. The Next ground relating to treating agricultural incomes from income from other sources. 11. We have heard the both the parties and perused the materials on record. The assessee has claimed Rs. 14,85,600/- agricultural income in the return filed for the assessment year 2007-08. The assessing Officer has disallowed Rs. 10,00,000/- out of Rs. 14,85,600/- and treated as income from other sources. The AO disallowed the claim on the basis of his inspector report which clearly shows that there was no agricultural operation carried out in the lands and except 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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