TMI Blog2019 (1) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... he profit of ₹ 1,20,21,138 earned by the assessee on the sale of agricultural land as exempt under section 2(14) of the Income tax Act. - Decided in favour of assessee - R/Tax Appeal No. 651 of 2018. - - - Dated:- 25-6-2018 - M. R. Shah And A.Y. Kogje JJ. For the Appellant: Mrs. Mauna M. Bhatt JUDGMENT M. R. SHAH J. - Feeling aggrieved and dissatisfied with the impugned judgment and order dated December 4, 2017 passed by the learned Income-tax Appellate Tribunal, Rajkot Bench, Rajkot in ITA No. 486/Rjt/ 2013 for the assessment year 2009-10, by which the learned Tribunal has allowed the appeal preferred by the assessee and has directed the Assessing Officer to treat the profit of ₹ 1,20,21,138 earned by the assessee on the sale of agricultural land as exempt under section 2(14) of the Income tax Act, 1961 the Revenue has preferred the present tax appeal with the following proposed questions of law: (A) Whether on the facts and in the circumstances of the case the Appellate Tribunal was legally correct in holding the assessee as agriculturist and treating the land sold as agricultural land. Thus, deleting the entire amount of ₹ 1,20,21,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer as well as the learned Commissioner of Income-tax (Appeals). 2.3 Feeling aggrieved, the Revenue preferred an appeal before the Appellate Tribunal. The assessee also filed cross appeal. By the impugned common judgment and order, the learned Tribunal has dismissed the appeal preferred by the Revenue and allowed the appeal preferred by the assessee by directing the Assessing Officer to treat the profit of ₹ 1,20,21,138 earned by the assessee on sale of agricultural land as exempt under section 2(14) of the Income-tax Act. 2.4 Feeling aggrieved and dissatisfied with the impugned judgment and order dated December 4, 2017 passed by the learned Income-tax Appellate Tribunal, Rajkot Bench, Rajkot in ITA No. 486/Rjt/2013 for the assessment year 2009-10, the Revenue has preferred the present tax appeal with the following proposed questions of law: (A) Whether on the facts and in the circumstances of the case the Appellate Tribunal was legally correct in holding the assessee as agriculturist and treating the land sold as agricultural land. Thus, deleting the entire amount of ₹ 1,20,21,138 ? (B) Whether the Appellate Tribunal has erred on facts and in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 (SC) and CWT v. Officer-InCharge (Court of Wards), Paigah reported in [1976] 105 ITR 133 (SC) and the decision of the Division Bench of this court in the case of CIT v. Minal Rameshchandra reported in [1987] 167 ITR 507 (Guj), it is requested to admit/allow the present appeal. 5. Heard Mrs. Bhatt, learned counsel appearing on behalf of the Revenue at length. 6. At the outset, it is required to be noted that the issue in the present appeal is whether the learned Income-tax Appellate Tribunal is right in directing the Assessing Officer to treat the profit of ₹ 1,20,21,138 earned by the assessee on the sale of agricultural land as exempt under section 2(14) of the Income-tax Act ? The Assessing Officer treated the profit earned by the assessee on sale of agricultural lands as business income and not as capital gains on sale of agricultural 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 ₹ 1,20,21,138 earned by the assessee from sale of agricultural lands as business income mainly on the grounds that (i) the land was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 2(14) of the Act, if the agricultural land as mentioned in section 2(14)(iii) is sold, the assessee shall be entitled to claim exemption on profit earned on sale of agricultural land as per section 2(14) read with section 45 of the Act, unless it is established and proved that the transaction carried out was adventure in the nature of trade and the profit thus required to be taxed as business income. On appreciation of evidence, the learned Tribunal has specifically observed and held that the transaction carried out by the assessee was not adventure in the nature of trade and therefore, profit earned was not required to be taxed as business income. The aforesaid is the finding recorded by the learned Tribunal on appreciation of evidence. 9. As observed hereinabove, the land was sold as an agricultural land and in fact, what was sold was agricultural land. What was the intention of the purchaser cannot be the determinative factor to treat the profit earned by the assessee on sale of agricultural land as business income. Similarly, merely because for whatever reason, the assessee has earned sufficiently huge amount of profit also cannot be a ground to treat the profit ea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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