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TMI Blog2020 (11) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... ant for trading and not for investment. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in deciding that gains from frequent property transactions of the assessee are not business profit but are capital gain. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in deleting the addition made on account of unexplained unsecured loan. 4. The appellant craves to add to, amend or later the above ground as may be deemed necessary." 3. The first interconnected issue raised by the Revenue in Ground No. 1 and 2 is that the Learned CIT-(A) erred in holding that the income generated by the assessee on the sale and purchase of land was chargeable to tax under the head capital gain instead of business income as held by the AO. 4. The facts in brief are that the assessee in the present case is an individual and filed his return of income declaring total income at Rs. 7,88,19,970/- and agriculture income of Rs. 1,32,315/- only. Out of the said total income, an income of Rs. 6,73,00,895/- was declared under the head capital gain consisting of Rs. 6,29,69,084/- towards the long-term capital gain and Rs. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), the ITAT has allowed the appeal in favour of the assessee and against the Revenue holding that "land/properties were held by the assessee as capital asset before its sale and consequential gains arising from sale thereto are chargeable under the head 'Capital Gains'. Accordingly, the AO is directed to consider the gains arising on sale of land/properties under the head Capital Gains". The ITAT has gone ahead to further direct the AO to de novo consider the relief as and where claimed by the assessee u/s 54B relevant to assessment years under appeal in accordance with law after requisite opportunity to the assessee. In view of the order dated 27/10/2016 of the Tribunal, the sale and purchase of land under consideration for the A.Y. 2013-14 is also to be treated as capital gains only. The AO is accordingly directed to delete the addition made of Rs. 2,80,44,681/- on account of treatment of capital gain as business income." 8. Being aggrieved by the order of the Learned CIT(A) the Revenue is in appeal before us. 9. The Learned DR before us vehemently supported the order of the AO whereas the Learned AR before us submitted that the Tribunal in the own case of the assessee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the CIT(A) in para-6 of his order, we note that the land/properties were purchased and held for several years in many cases before its sale. Coupled with this, we also take note of the fact that assessee has large capital of its own at its disposal which is far in excess of the corresponding investments made in land/properties over years. On cumulative reading of these glaring facts, we fail to comprehend the action of the Revenue in holding capital gains earned on sale as declared to be a business venture. It is manifest that the AO as well as CIT(A) misdirected themselves in law and on facts in holding the land/properties to be in the nature of trading asset merely on the ground that some of the agricultural land were converted into non-agricultural land and some agreements were entered for the development of the land in the year under appeal acquired and held for decades in many cases. We find considerable weight in the plea of the assessee that intention at the time of purchase to hold impugned land/properties as a capital asset is manifest on records. The balance-sheet filed by the assessee over years, wealthtax returns filed by the assessee, adequacy of its own capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er appeals in accordance with law after affording requisite opportunity to the assessee. We accordingly set aside the issue towards eligibility of relief claimed u/s.54B of the Act back to the file of the Assessing Officer for fresh consideration. " 11. There was no change in the facts and circumstances of the case on hand with thefacts of the case as discussed above. Furthermore, the Learned DR has not brought anything on record to controvert the finding of the Learned CIT(A). Accordingly, we are not inclined to interfere in the order of the Learned CIT(A). Hence, the ground of appeal of the Revenue is dismissed. 12. The second issue raised by the Revenue in Ground No. 3 is that the Learned CIT(A) erred in deleting the addition made by the AO for Rs. 37,25,000/- on account of unexplained unsecured loan under Section 68 of the Act. 13. The assessee during the assessment proceedings failed to furnish the necessary details to establish the identity, genuineness of the transactions and creditworthiness of the parties from whom he has taken the loan amounting to Rs. 37,25,000/- only under the provisions of Section 68 of the Act. The details of the parties from the assessee has take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, the Learned AR vehemently relied on the order of the Learned CIT(A). 19. We have heard the rival contentions and perused the materials available on record. From the preceding discussion, we note that the assessee has justified the conditions applicable with respect to cash credit under Section 68 of the Act i.e. identity, creditworthiness of the parties and the genuineness of the transactions of the loan taken from the parties as discussed above during the appellate proceedings. The necessary details furnished by the assessee in support of his claim were also forwarded to the AO for his comment. But we note that the Learned CIT(A) has given a clear finding that there was no adverse remark of the AO in the remand report with respect to the impugned unsecured loan. Therefore, the Learned CIT(A) has deleted the addition made by the AO. At the time of hearing the Learned DR has not brought anything on record contrary to the finding of the Learned CIT(A). Accordingly, we are not inclined to interfere in the order of Learned CIT(A). Hence, the ground of appeal of the Revenue is dismissed. 20. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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