TMI Blog2019 (8) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... arising on sale of land at Village Dhamane was on account of sale of investment. Since, there is no dispute that the land in question carried the features prescribed in section 2(14)(iii) and moreover, being analyzed by the Tribunal in the earlier orders, it qualifies to be an agricultural land excludable from the expression capital asset . We therefore, set aside the order of the Ld. CIT(A) and direct the AO to delete the addition on this count from the hands of the assessee. Thus, this ground of appeal raised by the assessee is allowed. Deemed dividend u/s. 2(22)(e) - treating business advance received from Kohinoor Shelter Private Limited - assessee filed additional evidences vide letter containing MOU between the assessee and M/s. Kohinoor Shelters Pvt. Ltd. which was subsequently cancelled along with confirmation of accounts - HELD THAT:- The view of the Ld. CIT(Appeals) is that since the affidavit of Mr. L.R Agarwal dated 14.03.2012 was filed at delayed time and therefore, the AO is correct that the story of MOU and its cancellation is nothing but an afterthought without any specific findings or reasons given on his part, is therefore, not correct. That within the ambi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was further pointed out that even in the 7/12 extracts which is land revenue record, it was stated land was agricultural land. Further, the Ld. AR invited our attention to the decision of the Co-ordinate Bench of the Tribunal, Pune in ITA No.1299/PN/2012 and ITA No.1300/PUN/2012 for assessment year 2008-09 in the case of Shri Krishnakumar K Goyal and Shri Vinit K Goyal who are the father and brother of the assessee herein. In their cases also, the lands from same Village Dhamane and its characteristic were determined by the Tribunal in order to decide whether these surplus could be taxed as business income or not. The main contention of the Revenue is that the assessee is land developer and therefore, it is a natural corollary that the surplus gain should be taxed as business income . The assessee had stated that even a person carrying on business can have an investment portfolio in the same commodities. In this context, reliance was placed on CBDT Circular No. 4 of 2007 dated 15.06.2007. That placing strong reliance on the aforesaid decision with regard to the land at the same Village Dhamane, the Ld. AR of the assessee prayed for deletion of addition. 4. Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In support of the same, a certificate of Dy. Director, Town Planning certifying that the land has been classified as an agricultural land in land revenue record is forming part of the sale-deed, a copy of which has also been placed in the Paper Book filed before us. All the aforesaid features pertaining to the land are not in dispute. However, the stand of the Revenue is that assessee being an individual engaged in the business of purchase and sale of lands, the intention to purchase the impugned land was a business proposition and not merely investment. 10. In our considered opinion, the issue as to whether impugned transaction is an activity in the nature of trade or an investment is a question which is required to be addressed having regard to the peculiar facts of the case. In the present case, one of the businesses of the appellant is purchase and sale of lands. The income from such activity in the past has been offered as business income. So however, the aforesaid factor ipso facto cannot be conclusive to establish that the purchase and sale of agricultural land at Dhamane village is also to be assessed as a business transaction. We say so for the reason tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this stage, we may deal with one of the observations made by the Assessing Officer, and the same has also been affirmed by the CIT(A), which is to the effect that subsequent to purchase of the land in question assessee has done land consolidation and development activity so as to improve the quality of land. The discussion made by the Assessing Officer in this regard read as under :- 5. Whether there was any act subsequent to the purchase to improve quality of the commodity purchased? Though it is not known as to whether there was any act subsequent to the purchase to improve quality of the land purchased, but the fact that the assessee has got a sale consideration of ₹ 1,53,50,000/- for a purchase cost of ₹ 13,28,860/- within a span of just one and a half year points to the fact that there must be a land consolidation and land development activity on the part of the assessee on the said land to improve its quality. 12. On this aspect, the CIT(A) has also noted that the entire land comprising of 106 acres was purchased by assessee alongwith other co-owners by four separate agreements. 13. In this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, we find there is no discussion in the assessment order. However, it would not be out of place to mention here that there is no credible material brought on record by the Assessing Officer to negate assessee s plea that the land in question continued to be in the nature of agricultural land even after it sale. 14. In view of the aforesaid discussion, it is quite clear that the land in question has been disclosed by the assessee as Investment and not as stock-in-trade. It is also clear that no steps were undertaken by the assessee for development of property during the period it held the same. Of-course, in the case of other agricultural lands owned by the assessee the period of holding is quite substantial. The circumstances explained by the assessee for having sold the agricultural land within a span of 17 months have also not been found to be false. Considering the aforesaid circumstances, in our view, the lower authorities erred in assessing the gain on sale of such land as a business income. The Tribunal also made reference to the judgment of the Hon ble Bombay High Court in the case of CIT Vs. Minguel Chandra Pais Anr. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces vide letter dated 15.03.2012 containing Memorandum of understanding between the assessee and M/s. Kohinoor Shelters Pvt. Ltd. which was subsequently cancelled along with confirmation of accounts from M/s. Kohinoor Shelters Pvt. Ltd. The assessee also filed affidavit from Shri L.R. Agarwal, stating that the same was presented before the Addl. CIT, Range-9, Pune on 29.12.2010 and the same was not accepted by him as the assessment order was already passed. The Ld. CIT(Appeals) while upholding the addition made by the Assessing Officer on this issue has mostly deliberated upon the timing within which these additional evidences were filed. The Ld. CIT(Appeals) has not adjudicated upon the admissibility or genuineness of these additional evidences. Rule 46A of the Income Tax Rules, 1962 does not specify any time limit for producing additional evidences. The view of the Ld. CIT(Appeals) is that since the affidavit of Mr. L.R Agarwal dated 14.03.2012 was filed at delayed time and therefore, the Assessing Officer is correct that the story of MOU and its cancellation is nothing but an afterthought without any specific findings or reasons given on his part, is therefore, not correct. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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