TMI Blog2013 (3) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act against the assessee and other group concerns. The assessee is Proprietor of M/s. Sancheti Promoters and Builders. In consequence of the notice issued u/s.153A of the Income-tax Act, the assessee filed the return of income. So far as the issue before us is concerned i.e. in respect of sale of 3 lands which particulars are as under: Sl. No. Particulars Year of Sale Year of Purchase Sale consideration amount Long Term Capital Gain declared by the assessee 1 Land at Kartaj 2005-06 1995-96 45,00,000/- 36,54,900 2 Land at Baner 2006- 07 2001-02 49,50,000/- 34,67,500/- 3 Land at Kasar Amboli 2007- 08 2001-02 13,33,334/- 10,89,125/- In respect of the sale consideration on the sale of the above lands the assessee has declared Long Term Capital Gain and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h seems to be a house wife only, is showing business of share trading and also buying and selling properties in the returns filed by her. It has been stated by Shri Surendra Sancheti in Q No 6 of his statement that he is looking after all the business activities and investments done in the name of wife. ii) The assessee has also developed some projects by herself in her proprietary concern M/s Sancheti Promoters and Builders. iii) The assessee is also a partner in M/s Jairaj Developers Unit-3 and M/s Gagan Developers which are also engaged in business of development and real estate. iv) Even her husband Shri. Surendra Sancheti, who is looking after the business activities of the Lake Town project as partner, has admitted to be looking after business activities of the assessee. v) There is no element of pride possession into it and the assessee has dealt into purchase and sale of these lands in the same manner as a persons engaged in real estate business would do and such transactions would b e in the nature of venture into the nature of trade. vi) Thus it is quite vivid that the intention of the assessee is to earn quick profit. vii) It would be pertinent to not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an investment. The assessee has sold alleged agricultural lands in the previous years relevant to assessment years 2005-06, 2006-07 and 2007-08. Secondly, for three of these assessment years there are very little transaction in the proprietor concern M/s Sancheti Promoters and Builders. Therefore for these relevant assessment years the sale of agricultural land is the substantive transaction which is an adventure in the nature of trade. (iv) The fourth test given by the circular is as below.- Ordinarily the purchase and sale of shares with the motive of earning a profit, would result in the transaction being in the nature of trade/adventure in the nature of trade; but where the object of the investment in shares of a company is to derive income by way of dividend, etc., then the profits accruing by change in such investment (by sale of shares) will yield capital gain and not revenue receipt. Here the relevant transaction is sale of agricultural land hence agricultural income should be considered as analogous to dividend. The agricultural income claimed by assessee is as below: Sr. No. A.Y. Agricultural Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he detailed discussions made hereinabove, the conclusion can be drawn that the entire activity of this appellant was within the domain of adventure in nature of trade. We are aware that by profession, Karta an Advocate but he has also entered into an activity, which can be held to be incidental to the business activity. His act prior to the acquisition was definitely assailed with the profit motive. He was aware at the time of purchase that the land in question was within the acquisition proceedings, hence it cannot be held as an investment for a long period. The land in question could never be a pride of possession since it was about to be acquired by the Government. The land in question was not going to be held, least to say, for a long time but even for sometime because the acquisition proceedings were in succession. Even it cannot be said to be a purchase for aesthetic possession. What is important for our consideration is its distinctive character, total effect of the intention of this appellant at the time of purchase, all the relevant factors as also surrounding circumstances so as to finally determine the true character of the transaction. We have also seen from the above p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of investments and not held as a business assets. Moreover the Ld.CIT(A) also considered the long period of holding of the lands by the assessee as well as the fact that the assessee never converted those lands for nonagriculture use. 5.1. The operative part of the reasons given by the Ld.CIT(A) is as under: I have carefully considered the grounds of appeal and the facts as well as law which are apparent from record. The appellant is an individual engaged in the activity of business, agriculture etc. and was searched u/s 132 of the IT. Act on 08.08.2007 along with other members of this group. In view of the same this assessment was completed u/s 143(3) r.w.s. 153A. It was found by the Assessing Officer that the appellant has sold agriculture land in A.Y. 2005-06, 2006-07 and 2007- 08. All the relevant details in respect of sale of these agriculture lands situated at Katraj, Baner and Kasar Amboli are available in the assessment order as well as in the submissions of the appellant which have already been quoted above. The appellant has shown that the lands sold were held by her as investment in agriculture land from 4 to 10 years on the dates of sale. It was also shown tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness and Profession. The appellant in addition to the basic facts already mentioned above, had argued before the Assessing Officer that the land was always held as agricultural land for carrying out the activity of agriculture and also for the pride of possession, agricultural income has been earned regularly which were accepted by the Assessing Officer, these lands were not shown in the business balance sheet, the lands were agricultural land in revenue record which were never got converted to NA land, were held for long period of time, the sale was not frequent or regular so as to constitute an organized activity essential for holding an activity as a business and because of the above facts it was claimed that the sale of agricultural land cannot be treated as a business activity, The appellant has also relied on numerous judgment which are noted in the assessment order to claim before the Assessing Officer that the claim made by them are legally correct. During appeal also similar arguments were put forth which can be seen from the submission already quoted above. It was further argued that the Assessing Officer erred in drawing the conclusion referred to above. It was claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seen to have further erred in coming to the conclusion that the facts of the case matches with the circumstances mentioned in the circular for arriving at the conclusion drawn by him. He has also clearly erred in applying the judgment of the ITAT Pune given in the case of Gopal Kasat quoted supra. The facts of the Gopal Kasat is entirely different from the facts of the appellant. In the said case the appellant had bought land after knowing the fact that those lands were under acquisition so as to make quick buck and therefore after noticing those facts the Honourable tribunal came to the conclusion that e said appellant had made investment with the objective of making quick money, because of which the investment was held as adventure in the nature of trade. The facts of the appellant are much different and therefore the AO can be seen to have erred completely in following this judgment. Considering the entire facts of the case and the law I am of the opinion that the appellant is correct in claiming the relief and therefore the appeal is allowed. Now the revenue is in appeal before us. 6. We have heard the rival submissions of the parties and also anxiously considered the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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