TMI Blog2020 (11) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... his deed of co-ownership. When this is admitted position that the purchase of the land in question in the month of September 2005 was in pursuance to this co-ownership agreement entered into in June 2002 and as per this co-ownership agreement, this is the business of this co-ownership to have joint purchase of land and the net income of the co-ownership after deduction of all expenses is to be shared by the co-owners in accordance with the manner provided in the co-ownership agreement, nothing further is required to be seen and it can concluded without any hesitation that the income arising on purchase and sale of land in pursuance to this co-ownership agreement is taxable as business income and this is not relevant as to whether any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income Tax (Appeals) erred in not considering the fact that the appellant was never in the business of real estate. held the asset as capital asset and the income was therefore assessable under the head capital gains. 4.The Learned Commissioner of Income Tax (Appeals) erred in confirming the order of the Assessing Officer and ignoring the fact that. just an act of conversion from agricultural purposes to industrial purposes would not amount to adventure in the nature of trade and hence the profit consequent to sale was assessable under the head capital gains and not under the head business. 5.The Learned Commissioner of Income Tax (Appeals) erred in holding that, the appellant is not eligible for exemption U/s.54F of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made in pursuance of one of the purposes of the co-ownership deed, copy of which is available on pages 15 5o 17 of the Paper Book and this co-ownership agreement is dated 15.06.2002. He submitted that although this co-ownership agreement was executed on 15.06.2002 but the first purchase of land in pursuance to this agreement is only on 17.09.2005 and this purchase of land is not for any business purpose and therefore, the gain arising on sale of the said land in the present year is taxable as long term capital gain and not as business income. He also pointed out that there is this observation of the AO and CIT(A) also that even if the gain is taxable under the head income from capital gain, the said gain in the present case is short t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment made between the assessee s brother and relative is only for the purpose of better future understanding to divide the share of land, the rights on property or gain/losses and hence, it is seen this is not the contention of the assessee that this land was not purchased in pursuance to the co-ownership agreement dated 15.06.2002. Hence, we proceed on this basis that the land in question was purchased by the assessee along with co-owners in pursuance to the deed of co-ownership entered into by the assessee with other 2 co-owners Shri. N. Srinivasan and K. N. Ramesh. Copy of this co-ownership agreement is available on pages 15 to 17 of the Paper Book and in clause 4 of this agreement, it is stated that the nature of business will be joint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regarding taxability of the gain in a case where lease hold right was converted into free hold right. This judgment is not applicable in the present case. The second judgment relied upon by him is the judgment of Hon ble Delhi High Court rendered in the case of CIT Vs. Frick India Ltd., 369 ITR 328 and in this case, the written lease agreement was for 3 years but the assessee continued to pay rent and occupied the premises for 11 more years and under these facts, it was held that the amount received on surrender of tenancy is long term capital gain. This judgment is also not applicable in the present case. The third judgment relied upon by him is the judgment of Hon ble Punjab and Haryana High Court rendered in the case of CIT Vs. Ved Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital gains. This judgment is also not applicable in the present case because in the present case, we have seen that the purchase of land itself was in pursuance to co-ownership agreed dated 15.06.2002 and as per this agreement, joint purchase of land by this co-ownership was for the purpose of business and therefore, the gain arising on such purchase and sale of land by the co-ownership has to be assessed as business income and this judgment is not applicable in the facts of the present case. 6. The last and sixth judgment cited is the judgment of Hon ble Rajasthan High Court rendered in the case of CIT Vs. Manna Lal Nirmal Kumar Surana 264 ITR 116. In this case, the issue involved was regarding income on sale of jewellery and precio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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