TMI Blog2017 (6) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... the intention of the assessee at the time of purchase of land is a crucial factor. Subsequent genesis of intention, which led to the sale transfer of land, does not help the Assessing Officer to hold a particular transaction as the transaction as an “Adventure in the nature of Trade’. It is the case of genesis of intention to trade the asset subsequent to the timing of purchase of land. Therefore, we are of the opinion, despite the assessee’s background as businessman, this particular transaction is outside the scope of an ‘Adventure in the nature of Trade. Thus, the core issue raised by the assessee in the appeal stand allowed in favour of the assessee. - ITA No. 283/PUN/2014 - - - Dated:- 30-5-2017 - SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Pawan Chakrapani For The Revenue : Shri Sudhanshu Shekhar ORDER PER D. KARUNAKARA RAO, AM : This appeal filed by the Assessee is directed against the order of the Commissioner of Income Tax (Appeals)-II, Pune, dated 25-10-2013 for the Assessment year 2009-10. 2. Ground Nos.1 and 9 to 11 are said to be either general in nature or consequential in nature. Accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Hinjewadi, there is no dispute before us. The incomes earned from the related transactions were taxed as Business income. However, with regard to the purchase and sale of transaction of land at Bhivari, the assessee claimed exemption considering the agricultural nature of the lands at Bhivari. The relevant facts are given at pages 5 and 6 of the assessment order which read as under : Sale of land at Bhivari The assessee has sold agricultural land admeasuring 3.80 R at village Bhivri, Tal. Haveli, Dist. Pune for consideration of ₹ 1,38,75,000/- vide agreement dt. 3-6-2008. This land was purchased on 5-12-2006 for a consideration of ₹ 19,42,500/-. This was purchased jointly with Shri Tushar Atmaram Kalate. The assessee has claimed sale commission of ₹ 4,62,500/- out of pocket expenses from purchase cost. Except self made cash vouchers no other supporting evidence has been produced to prove the nexus of these expenses with the above transaction. However, 1,85,000/- is allowed as deduction based on the vouchers. The profit on sale of this transaction is worked out as under : Sale consideration Rs.13875000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural land admeasuring 3.80 R. Assessee submitted that the conclusion of the Assessing Officer by invoking the provisions of section 2(14) with reference to the transaction of Adventure in the nature of Trade is not proper. Assessee relied on various decisions to support his case. However, the CIT(A) relied on the decision of Hon ble Supreme Court in the case of G. Venkataswami Naidu Co. Vs. CIT 35 ITR 594 (SC). The assessee s argument that the agricultural land, with agricultural operations in it, is outside the scope of taxation and the agricultural income should not be taxed under the statute. However, the CIT(A) is of the view that in short span of time the investment of ₹ 19,42,500/- has grown upto a sum of ₹ 1,38,75,000/-. Such increase is possible only with a commercial asset and not with agricultural asset. As the CIT(A) is of the view that the assessee acquired the said agricultural land solely and exclusively with the intention of re-sale at a profit and has no intention of holding the property for himself or otherwise. He further held that the presence of such intention is a relevant and crucial factor for determining the particular transaction constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me in view of the exemptions available to the transactions of sale of agricultural land. Ld. Authorised Representative argued that the other co-owner of the land left out by the Revenue without taxing the other 50% of the sale proceeds. In such circumstances, it is the demand of Ld. Authorised Representative that the addition made by the Assessing Officer in the hands of the assessee is not sustainable in law. For this proposition, Ld. Authorised Representative for the assessee relied on Honble Madras High Court judgment in the case of S. Murthukarupan 290 ITR 0154 (Mad.) 8. Per contra, Ld. Departmental Representative for the Revenue narrated the above referred facts of the case and mentioned that the assessee, apart from being a Tailor and Real Estate Agent, is also a full pledged businessman engaged in purchase and sale of land. For this, he relied on the transactions entered into by the assessee with regard to the properties at Sus Village, Kondhwa Khurd, Hinjewadi etc. A person with a business mind is obviously engaged in the purchase and sale of the impugned agricultural land with a business motive. In such case, the order of the AO/CIT(A) is proper and the same should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer. It is settled legal proposition in law that, for holding a particular transaction as an Adventure in the nature of Trade , the intention of the assessee at the time of purchase of land is a crucial factor. Subsequent genesis of intention, which led to the sale transfer of land, does not help the Assessing Officer to hold a particular transaction as the transaction as an Adventure in the nature of Trade . In our view, it is the case of genesis of intention to trade the asset subsequent to the timing of purchase of land. Therefore, we are of the opinion, despite the assessee s background as businessman, this particular transaction is outside the scope of an Adventure in the nature of Trade. Thus, the core issue raised by the assessee in the appeal stand allowed in favour of the assessee. As such, the Madras High Court in the case of S. Murthukarupan (supra) hold that no addition could be made in case of assessee where no such addition was made in assessments of other co-owners. Hence, the grounds raised by the assessee are allowed. 12. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on this 30th day of May ..... X X X X Extracts X X X X X X X X Extracts X X X X
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