TMI Blog2016 (8) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... -08-2013 of Gram Adhikari Dongargaon states that plot of land was an agricultural land since it was purchased till the date of compulsory acquisition. AO himself has admitted referring to the 7/12 extracts. that land in question was agricultural land in the earlier assessment years. In our opinion, the character of land would not change automatically in subsequent years until and unless the same is used for some other purposes There is nothing on record to show that the land was not used for agricultural purposes. The AO has not brought on record to prove the fact that agricultural land was converted into non agricultural land or that the assessee had applied for such conversion. The AO had referred to the aerial distance to determine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to ₹ 2.78 crores that it had acquired a plot of land having an area of 2.55 hectors situated at village Dongargaon on 28-01-2010 for a consideration of ₹ 1.15 crores. He observed that it was obligatory on the part of the assessee to file return of income, it failed to comply with the provisions of section 139(1) of the Act, that the plot of land was acquired by the State Land Acquisition Officer, Nagpur (NHAI) and a sum of ₹ 2.98 crores was paid to it on 30-03-2011, that it considered the surplus of ₹ 2.78 crores as income from business and subsequently claimed the whole amount as exempt under the Act. The AO directed the assessee to state the section under which exemption was claimed. In response to the above the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ociation(127ITR 431),Gurdial Naraindas Co.(50 ITR 633), Raja Rameshwar Rao 42 ITR 179) and others. After considering the available material, the AO held that gain on acquisition of land was fully chargeable to tax, that it had failed to compute the book profit, u/s 115JB, that as per the P L account the net profit for company as per the provisions of the Companies Act worked out to ₹ 2.77 crores that the provisions of section 115JB were applicable, that the land was situated within the radius of 8 kms. Finally, business income of the assessee from the transfer of the plot of land was computed at ₹ 2.78 crores, as stated earlier. 3.Aggrieved by the order of the AO, the assessee preferred appeal before the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be taxed under the head Business profession or capital gain, that the AO was under presumption that the assessee was in the business of real estate activities that his presumption was based on incorrect facts, that transaction was not a business transaction that the assessee had actually bought the plot of land to develop a lawn where marriages could be solemnized. After considering the submissions of the assessee and the assessment order, the FAA held that the assessee had filed a copy of 7/12 extract a certificate from Gram Panchayat copy of sale deed and other details of acquisition of land by NHAI in support of its claim for land in question being agricultural land, that the plot was purchased in January, 2010, it was acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessed as business income. The Authorised Representative (AR) supported the order of the FAA. He referred to the Circular No. 17 of 2015 dated 06-10-2015, F.No. 279-Misc.-140-2015-ITJ and stated that letters of the Talathi of Dongargaon and Valuation Department proved that the plot was outside the municipal limits. 5.We have heard the rival submissions and perused the material before us. We find that the plot of land was situated in Dongargaon that the assessee had filed copies of registered sale deed along with copy of 7/12 extract, that the land in question was categoriesed as agricultural land in the revenue record. In these circumstances, in our opinion, the FAA was justified in holding that the land in question was agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X
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