TMI Blog2015 (4) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the land is recorded as investment. The assessee sought permission from village Panchayat for construciton of farm house. The Ld. CIT(A) has held that this land is agricultural land this is a finding of fac. The Ld. CIT(A) has also relied upon the decision of Hon’ble Supreme Court in the case of Sarifabibi Mohmed Ibrahim [1993 (9) TMI 10 - SUPREME Court]. These tests were considered by Hon’ble Bombay High Court in the case of Ms. Debbie Alemao and Jaoquim Alemao [2010 (9) TMI 560 - Bombay High Court]. Learned CIT(A) relied upon this decision and held that the land in questions an agricultural land and income from sale of such land will not farm part of gross total income. Hence, Ld. CIT(A) has allowed the appeal of the assessee. Therefore, we confirm the action of Ld. CIT(A) and appeal of the Department is dismissed. In relation to dis-allowance of expenses , it was held that we have heard rival contentions of both the parties. The Ld. CIT(A) has verified the vouchers of the assessee and did not find any mistake, therefore he has deleted the addition. During the course of hearing, learned DR did not point out any material against the finding of Ld. CIT(A). Therefore, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udice the above CIT(A) failed to appreciate that evidence showing that no agricultural operations were carried out on land and hence the land cannot be treat as agricultural land it is liable to capital gains. Reliance is placed on the Bombay High Court decision in the case of Fazalbhoy Investment Co. Ltd. Vs. CIT (Bom) 176 ITR 523 Kalpetta Estates Limited Vs CIT (Ker) 185 ITR 318. 6. The CIT(A) erred in not considering report of the inspector of this office merely on the ground that the assessee is not given the opportunity to explain his stand on this report. The inspector of this office who measured the land held that the land sold by the assessee is well within the 8 Kms from Municipal Limits CIT(A) wrongly relied on the Village Panchayat Certificate brought by the assessee which is self serving. 7. Whether the Ld CIT(A) is right in deleting the disallowance of expenses of ₹ 10,00,0007- under the facts and circumstances. 8. For these and other grounds that may be urged at the time of hearing it is prayed that the order of the learned CIT(A) may be set aside and order of Assessing Officer is restored. 9. The appellant craves, leave to add, amend or al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this property is known as Vacombi, measuring about 15400 sq. mts and situated near Maina and Gancim wards of Batim Village. It is seen that in this property there are no fruit bearing trees and only wild forest trees exists. Mr. Jemajo Braz Rego who sold the land to the assessee was met and enquired. It is stated that no agriculture activity or cultivation was done by him at any point of time. Further as seen from the state of the land no agricultural activity was carried on by the assessee. At present, there is neither agricultural activity going on nor any agricultural laborers working anywhere in this property. It is also seen that this said property is situated within 8km. kilometers from the limits of Panaji Municipal Corporation as per Inspector's report. From the above facts and the findings of the enquiry, the claim of the assessee that the plot is Agricultural land and hence cannot be considered as Capital asset as per the provisions of section 2(14) cannot be accepted and the claim is untrue and non-genuine for the following reasons:- 1. The land is Non-Agricultural and is only wild forest. 2. No Agriculture activity and Cultivation has been carried out at an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural land not situated within 8 kms. from the municipal limits of a municipal corporation. The A.O. sent his Inspector for spot verification of the land and obtained a report and the same was used by the A.O. against the assessee in the assessment order. Apparently, this inquiry was carried out by the A.O. behind the back of the assessee. There is nothing wrong with this. But since the A.O. desired to use it against the assessee as a piece of evidence, he was under obligation to confront the assessee with Inspectors Report. Since the A.O. failed to do so, the Inspectors Report becomes irrelevant. Now, coming back to the intention of the appellant, the A.O. treated the gain arising out of sale of land, as business income, because the assessee is a real estate developer and builder by profession. One's intention can be determined, through his conduct. After purchase of land, the appellant accounted for the same as 'Investment' and not 'stock-in-trade' in his books. I have verified the Balance-Sheet of the appellant and find that, the land has been recorded as Investment. Besides this, the appellant also sought permission from the Village Panchayat for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 km. away from Panaji Municipality, therefore Ld. CIT(A) is justified in his action. 7. We have heard rival contentions of both the parties. Looking to the facts and circumstances of the case, we find that the Ld. CIT(A) has verified the sale deed, record of rights and the certificate of village Panchayat Batim. The Ld. CIT(A) has held that the land has been purchased and it is sold within three financial year. The land has cashew nuts, mango trees, teak wood plantation and tenant is cultivating the same and pressing his tenancy right. The Ld. CIT(A) has given this fact on the basis of the evidence that the tenant has filed the suit against the owner of the property. Ld. CIT(A) has also further held that the land is not within 8 km. from the municipal limit. Ld. CIT(A) has held that assessee is a real estate developer, but he has not shown this purchase of land as stock-in-trade in his books of accounts. The Ld. CIT(A) has verified the balance sheet of the assessee and found that the land is recorded as investment. The assessee sought permission from village Panchayat for consutrciton of farm house. The Ld. CIT(A) has held that this land is agricultural land this is a finding o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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