TMI Blog2018 (8) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee on sale of agriculture land as business income. Similarly, merely because for whatever reason, the assessee has earned sufficient huge amount of profit also cannot be a ground to treat the profit earned by the assessee on sale of agriculture land as business income. The learned Tribunal has not committed any error in directing the Assessing Officer to treat the profit earned by the assessee on the sale of agriculture land as exempt under Section 2(14) of he Income Tax Act. - R/TAX APPEAL NO. 672 of 2018 - - - Dated:- 26-6-2018 - MR. M.R. SHAH AND MR. A.Y. KOGJE, JJ. For The Petitioner : Mrs Mauna M Bhatt (174) ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1. Feeling aggrieved and dissatisfied with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54,000/- and the same was gifted to the assessee by her father on 02.09.2008, where stamp duty of ₹ 59,100/- was paid taking the market value of the land at ₹ 12,00,000/-; that the said land was then sold by the assessee to M/s.SPG Infrastructure Ltd., Mumbai for ₹ 70,00,000/- and that the Assessing Officer rejected the claim of the assessee of exempt profit mainly on the ground that the land in question was sold to an industrial unit and had potential to be used for industrial purpose and therefore, the same was held as business profit and the Assessing Officer made addition of ₹ 68,18,800/- and assessed the income at ₹ 69,72,237/-. 2.2 Feeling aggrieved and dissatisfied with the above, the assessee prefer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, learned Counsel appearing on behalf of the Revenue that the learned Tribunal has not properly appreciated the fact that the land was purchased by the purchaser for industrial purpose and therefore, the same could not have been treated as agriculture land and therefore, profit arising out of sale of such land was not required to be exempted under Section 2(14) of the Income Tax Act as claimed by the assessee. 4.2 It is further submitted by Mrs.Bhatt, learned Counsel appearing on behalf of the Revenue that even considering the fact that the lands were sold by the assessee within a short span of time and earned sufficient large amount of profit, the learned Tribunal ought to have treated and considered the same as capital asset, not liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(14) of he Income Tax Act? The Assessing Officer treated the profit earned by the assessee on sale of agriculture lands as business income and not as capital gain on sale of agriculture lands, which is exempt from tax under Section 2(14) read with Section 45 of the Act. 7. From the order passed by the Assessing Officer, it appears that the Assessing Officer treated the profit of ₹ 68,18,800/- earned by the assessee from sale of agriculture lands as business income mainly on the grounds that (i) the land was sold to the company, which used the said land for industrial purpose; (ii) that there was a steep rise in the profit and (iii) that the lands were sold within a short span of time. However, it is required to be noted and it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but not exceeding one lakh; or ( II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or. ( III)not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh. Explanation- For the purposes of this sub-clause, population means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year;]] 8. Therefore, on plain reading of Section 2(14) of the Act, if the agriculture land as men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of he Income Tax Act. 11. Now, so far as the reliance placed upon the decision of the Hon ble Supreme Court in the case of G.Venkataswami Naidu Co. (supra) is concerned, considering the facts before the Hon ble Supreme Court, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand. The Hon ble Supreme Court was considering Section 2(13) of the Income Tax Act and the definition contained in Section 2(13) fell for consideration before the Hon ble Supreme Court. The wordings in Sections 2(13) and 2(14) are different. Therefore, the said decision shall not be applicable to the facts of the case on hand. 12. Similarly, decision of the Hon ble Supreme Court in the case of Commissioner of Weal ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
