TMI Blog2011 (12) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of this common order for the sake of convenience. 2. First, we take up the appeal of the assessee for the assessment year 2000-01 in I.T.A.No. 1001/Ahd/2004. The assessee has raised one additional ground which is as under: In assessment order for assessment year 2000-01 passed is in violation of rules of natural justice and, therefore, bad at law as the copies of documents marked Annexure A, Annexure-B, Annexure- C and Annexure-D stated to have been annexed to the assessment order under reference were neither annexed to the assessment order nor the copies thereof were supplied to the appellant during the course of the assessment proceedings. 3. In the course of hearing before us, the Ld. A.R. did not press the additional ground and hence, the additional ground is rejected as not pressed. 4. The grounds raised by the assessee in the memo of appeal are as under: 1) The Ld. CIT(A) XII Ahmedabad has erred in law and on facts of the case in confirming the action of the A.O. holding that income of ₹ 69,41,910/- from sale of agricultural lands at survey No.41, 42/1, 42/2, 43/2 and 44/3 at village Amiyapur Distt. Gandhinagar is a business income and not a lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of ₹ 69,41,910/- as business income. Being aggrieved, the assessee carried the matter in appeal before Ld. CIT(A) but without success and now, the assessee is in further appeal before us. 6. It was submitted by the Ld. A.R. before us that the assessee HUF is an agriculturist under the Bombay tenancy Act (as applicable to Gujarat). He has submitted that the land in question was agricultural land purchased by the assessee in financial year 1994-95. He also submitted that the agricultural activities were carried out till financial year 1998-99 which is supported by copy of 7/12 record on pages 9-13 of the paper book, english translation of which was submitted separately. He further submitted that as per Section 63 of Bombay Tenancy Agricultural Land Act 1948, transfer to non agriculturist is prohibited without permission from the Government and in order to sell agricultural land to non agricultural activities for residential/commercial purposes, permission under Section 65 of Bombay Land Revenue Court has to be obtained. He further submitted that since the land is situated in the periphery of 8 Km of Ahmedabad city, the provisions of Urban Land Ceiling Act (ULCA) regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C.). He also placed reliance on the judgment of Hon ble Gujarat High Corrupt rendered in the case of CIT Vs Premji Gopalbhai as reported in 113 ITR 785 (Guj.). It was submitted that in these two cases, it was held that onus of proving that the transaction was an adventure in the nature of trade was on the Revenue and in the present case, revenue has not discharged this onus. He also placed reliance on a judgement of Hon ble Madras High Court rendered in the case of CIT Vs NSS Investments Pvt. Ltd. as reported in 277 ITR 149 (Mad.) wherein, it was held that the treatment in account of the assets is important. Reliance was also placed on the following decisions also in support of this contention: (a) Gomti Credits (P) Ltd. Vs DCIT 164 Taxman 69 (b) CIT Vs Ess Jay Enterprise (P) Ltd. 173 Taxman 01 (c) CIT Vs Sohan Khan 304 ITR 194 (Raj.) (d) ITO Vs D N Krishnapa 21 DTR 11 (Bang.) 7. The Bench asked the Ld. A.R. to file the wealth tax return filed by the assessee for the assessment year 1990-91 to assessment year 2001-02 and in reply, it was submitted by the Ld. A.R. that the wealth tax returns are not available with the assessee at present. It was also submitted that S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order. He has considered all the documents relating to the acquisition and sale of land. I find that the AO has considered all the submissions of the appellant before finalising the assessment and hence the arguments of the appellant that the AO has not granted proper opportunity of explaining the material is not sustainable. Even before the undersigned also no fresh facts was brought out, which were not before the AO and hence it cannot be said that the AO has not granted proper opportunity to the appellant. The submissions of the appellant by letter dated 23.12.2003 are duly considered. From the overall facts of the case, it emerges that the appellant though not personally in the business of development of land for construction of houses and sale, but there are sister concerns, where appellant has a major role to play, which have undertaken such business. The intention of the appellant was very clear in the year 1994-95, when the alleged agricultural land at Amiyapur was purchased with the intention to develop, obtain no objection certificate for converting the land into non agricultural and then based on enhanced market price, selling the land to developers. Had the intention b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land at various times strengthens the conclusion that appellant has entered into the business in the nature of adventure. I, therefore, hold that the AO has correctly concluded that the profit from the sale of the land at Amiyapur is taxable as income from business. The order of the AO, on this point is, therefore, confirmed. 3. In the result, the appeal is dismissed. 10. From the above para of the order of Ld. CIT(A), we find that a clear finding is given by the Ld. CIT(A) that from the date of purchase till the date of sale, no agricultural activity was carried out in the land in question and no income from agricultural produce has been declared by the assessee in any of the assessment year from the date of purchase of the land in question. In spite of this clear finding of Ld. CIT(A), although the contentions are raised before us also that the agricultural operation was carried out on the said land but no evidence in this regard was brought on record before us in support of this contention. It was submitted by the assessee before us that in support of this contention, copy of 7/12 records are available on pages 9-14 of the paper book. The assessee has furnished English tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific attention was drawn in the course of haring and we do not discuss other judgements copy of which are available in various paper books but our attention was not drawn to those judgements in the course of hearing. - The first judgment on which our attention was drawn is the judgement of Hon ble Apex Court rendered in the case of Jankiram Bahadur Ram Vs CIT (supra). In our considered opinion, this judgment is not applicable in the present case because the facts are different. In that case, the land was purchased by the assessee with jute press whereas the press was not run by the assessee and the property was later on sold by the assessee and under these facts, it was held that the sale transaction was adventure in nature of trade is also mixed question of law and fact. In that case, it was not the fact brought on record by the revenue that the assessee is doing such regular purchase and sale of the property whereas in the present case, assessee is regularly purchasing and selling the land and, therefore, this judgement is not applicable in the present case. - The 2nd judgment cited by the Ld. A.R. is the judgment of Hon ble Bombay High Court rendered in the case of Bho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. The land was repurchased by the assessee because it was adjacent to the land in which the existing building of the assessee stood. But in the present case, the facts are different and hence, this judgment is also of no help to the assessee. - The next judgment cited by the assessee is of Hon ble Gujarat High Court rendered in the case of CIT Vs Hiralal Manilal Mody (supra). This judgement is also not applicable in the present case because the facts are different. In that case, there was an agreement for purchase of property and the vendor failed to execute deed of conveyance within the stipulated time and vendor agreed to pay damages and the issue in dispute was whether such damage paid by the vendor was taxable as business income and it was held that this is not an income of the assessee and not taxable because the vendor had agreed to pay the assessee for he loss of a good bargain which the assessee had to forego because the vendor was not prepared to execute deed of conveyance and it did not represent the income of the assessee. In the present case, the facts are different and therefore, this judgement is also not applicable in the present case. - The next decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt is not applicable in the present case. - The next decision cited by the Ld. A.R. is the tribunal decision rendered in the case of Gomti Credits Pvt. Ltd. Vs DCIT (supra). In that case, the dispute was regarding the amount received by the assessee towards non compete fee and it was held that it was not in the course of ordinary business operation and therefore, the same is to be treated as capital receipt. In the present case, the facts are totally different and hence, this tribunal decision is of no help to the assessee in the present case. - The next tribunal decision cited by the Ld. A.R. of the assessee is the judgement rendered in the case of J.M. Share Stock Brokers Ltd. Vs JCIT (supra). Copy of this judgment is available on pages 10-21 of the paper book containing judgments. In that case, the facts are that it is noted by the tribunal in para 15 of the Tribunal decision that the assessee is a share broker and earning brokerage income and in addition to this, assessee is purchasing and selling the shares and debentures etc. both as stock in trade and also as investment. It is also noted that these profits / losses on sale of shares and debentures held as stock in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, even if it is an agricultural land, the sale thereof is liable to tax either as capital gain if it is held as investment or as business income if it is held as business asset and for the purpose of adventure in nature and trade and, therefore, this judgment of Hon ble Delhi High Court is not applicable in the present case. - Another decision cited by the Ld. A.R. being the judgment of Hon ble Bombay High court rendered in the case of CIT Vs Smt. Debbie Alemao and Joaquim Alemao as reported in 331 ITR 59 (bby.). This judgment is also not applicable in the present case because the facts are different. In that case, the question was whether certain piece of land was agricultural or non agricultural. In the present case, the decision is not based on this aspect as to whether this land in question was agricultural land or not because earning profit on sale thereof are liable to tax either as capital gain if it is held as investment and otherwise, as business income. Hence, this decision of Hon ble Bombay High Court is also not applicable in the present case. 11. We have seen that none of the judgments cited by the Ld. A.R. is rendering any help to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer. 3. It is therefore, prayed that the order of the Ld. CIT(A) may be set-aside and that of the order of the Assessing Officer be restored to the above extent. 17. Ld. D.R. supported the penalty order whereas Ld. A.R. supported the order of Ld. CIT(A). Reliance was placed by him on the judgment of Hon ble Apex Court rendered in the case of CIT Vs Reliance Petro Products Pvt. Ltd. as reported in 322 ITR 158 (S.C.) and on the judgment of Hon ble Gujarat High court rendered in the case of Hotel Sabar Pvt. Ltd. as reported in 264 ITR 381 (Guj.). This issue has been decided by Ld. CIT(A) as per para 4 of his order which is reproduced below: 4. I have considered the submissions of the Authorised Representative carefully. The appellant had furnished details of Long term capital gain of ₹ 65,65,5897- with particulars of land, area of land sold, date of purchase and date of sale. The lands purchased by the appellant at Amiapur were agricultural lands and the same were existing in special agricultural zone. So the land was to be used only for agricultural purposes. As explained by the appellant, the appellant entered into agreement for sale of land to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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