TMI Blog2011 (7) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... de. (v) Considering the G.O.Ms. No.352, MA. Dtd. 30.7.2001, issued by Municipal Administration and Urban Development, Govt. of Andhra Pradesh, notifying the surrounding (proposed Shamshabad International Airport) area lands as commercial and special development area, thereby the lands in question are not agril.lands but commercial lands. (vi) If the CIT (A) s order is found to be correct on the facts of the case and in the eyes of law, then, considering the G.O. Ms. No.352 M.A. dtd 30-7-2001, issued by the Municipal Administration and Urban Development, Govt. of A.P alternatively the CIT (A) ought to have considered the same to tax the profits liable to capital gain. (vii) Any other ground or grounds that may be urged at the time of hearing . In the cross objection, the assessee is assailing the decision of Ld CIT(A) in enhancing the assessment by ₹ 12,000/-. 3. The facts relating to the issues are stated in brief. The assessee filed her return of income for the year under consideration declaring NIL income. She is deriving income from house property, share income from a partnership firm and agricultural income. Her case was taken up for scrutiny. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the lessee of the land. However the said lessee did not appear before the assessing officer. Hence, during the course of appellate proceeding, the Ld CIT(A) directed the assessing officer to examine the said lessee and file a remand report. The assessing officer reported that the lessee was not able to produce any evidence like purchase bills for seeds/manures/fertilizers, bills for sale of agricultural produce etc. The said lessee was also not aware of another bit of land held by the assessee in the same area, which the assessing officer considered as beyond comprehension. Hence the assessing officer opined that the authenticity of the claim of agricultural operations by the said lessee is not proved. Accordingly the assessing officer recommended the enhancement of income of the assessee by ₹ 12,000/- by disallowing the agricultural income. Accordingly the Ld CIT(A) enhanced the income of the assessee without giving notice of enhancement to the assessee. Aggrieved by the order of Ld CIT(A) both the revenue has filed this appeal and the assessee has filed the cross objection before us. 4. The grounds numbered as 1, 2 and 7 in the appeal of the revenue are general in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om tax. On going through the records thoroughly, it transpires that the only point for consideration for the AO was as to how the difference of ₹ 52,47,000/- could be brought to tax Hence the point of dispute is not whether the impugned land is an agricultural land or not, as contended by Ld D.R. We also notice that the assessing officer has referred the impugned land as dry agricultural land through out the assessment order. The certificate issued by the Asst. Executive engineer, Roads division describes the impugned land as agricultural land. The assessee has also filed a copy of order issued by the Mandal revenue officer, Maheswaram mandal for transferring the name of the assessee in the patta book and revenue records. Hence, we are unable to appreciate at this stage, the contention of the Ld D.R that the impugned land is not an agricultural land. 6. Now the solitary issue under consideration is whether the impugned sale transaction can be described as an adventure in the nature of trade. We notice that the assessing officer has considered following points for this purpose. a) The assessee has purchased 262 sq. yards of site in April, 2003 and sold the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable to income tax. It was held that the assessee knew that it would be able to sell the lands to the managed company whenever it thought it so to do, and that the assessee purchased the four plots of land with the sole intention of selling them to the Company Mills at a profit, and that, therefore, the transaction was an adventure in the nature of trade . It could be noticed that the main points which triggered the Hon ble Supreme Court in the above cited case to hold that the impugned transactions of purchase and sale of land are:- (a) The assessee therein was managing a mill. (b) The lands were situated adjacent to the said mill. (c) The assessee did not carry out any agricultural activity and allowed the land to remain as it is unutilized except letting out a house existed on one of the land. (d) The assessee knew that it would be able to sell the lands to the company managed by him when ever it thought it to do so and hence the assessee purchased the four plots of land with the sole intention of selling them to the Company Mills at a profit. Hence, it is clear now that the intention of the assessee at the time of making investment is the sole criteria for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. 251(2), which read as under: The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. It was not shown by the revenue that the assessee was given reasonable opportunity for the purpose of enhancement of income. Since the action of the Ld CIT(A) is against the mandate of the provisions of Act, the said enhancement is liable to be quashed. Even on merits, we notice that the assessee has filed confirmation letter from the lessee and in the statement taken from him, the lessee has accepted that he has carried out agricultural operations on the impugned land. The assessing officer has initially accepted the agricultural income declared by the assessee. Only in the course of remand proceedings, the assessing officer has recommended for treating the same as non-agricultural income for the reason that the lessee could not produce bills etc. In our view, one cannot expect a small farmer to maintain detailed accounts of his agricultural activities with supporting bills. Hence we do not find any merit in the recommendation mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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