DY COMMISSIONER OF INCOME TAX CIRCLE 7 PUNE, PUNE V. KRUTI LALITKUMAR JAIN, PUNE

ITA 1554/PUN/2024

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) / NFAC, which had reversed the Assessing Officer's decision that treated the profit from the sale of land by the assessee, Kruti Lalitkumar Jain, as business income. The Assessing Officer had reclassified the income from long-term capital gains to business income, citing the assessee's regular engagement in real estate transactions and the use of borrowed funds for purchasing the land. However, the CIT(A) found that the land was held for more than five years without any developmental activity, and the transactions in question were consistent with capital asset management rather than business operations. The Tribunal supported the CIT(A)'s decision, emphasizing the need for consistency in tax treatment across assessment years and the lack of evidence to classify the land as stock-in-trade.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 32413 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-11-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 24-07-2024
• Other Referred Cases: G. Venkataswami Naidu & Co. vs. CIT, CIT v. Gopal Purohit, CIT v. Yatish Trading Co. Pvt. Ltd., CIT v. Madan Gopal Radhey Lal, Radha Satsang vs. CIT, JCIT vs. Adrus Estate and Properties LLP
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P MURKUNDE
• Assessee Lawyers: NIKHIL PATHAK
• Keywords: Business income; Capital asset; Salary income; Cost of acquisition; Rule of consistency; Capital Gains
• Section: 143(3); 143(2); 22; 54F; 13; 73

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS ASTHA CHANDRA, JUDICIAL MEMBER ITA No.1554/PUN/2024 Assessment Year : 2013-14 DCIT, Circle-7, Pune Vs. Kruti Lalitkumar Jain 10th Floor, Kumar Business Centre, Bund Garden Road, Bund Garden, Pune – 411001 PAN: AFXPJ2261C (Appellant) (Respondent) Assessee by : Shri Nikhil Pathak Department by : Shri Ramnath P Murkunde Date of hearing : 05-11-2024 Date of pronouncement : 19-11-2024 O R D E R PER R.K. PANDA, VP : This appeal filed by the Revenue is directed against the order dated 06.03.2024 of the CIT(A) / NFAC, Delhi relating to assessment year 2013-14. 2. Facts of the case in brief, are that the assessee is an individual and filed her return of income on 30.07.2013 declaring total income of Rs.71,48,938/- which consisted of income from salary, capital gain and income from other sources. The case was selected for scrutiny under CASS and notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred to as “the Act‟) was issued to the assessee on 02.09.2014 which was duly served on the assessee. Subsequently, notice u/s 142(1) of the Act along with questionnaire was issued to the assessee on 2 ITA No.1554/PUN/2024 05.10.2015, in response to which, the AR of the assessee filed the requisite details from time to time. 3. During the course of assessment proceedings the Assessing Officer noted that the assessee has sold her land at Survey No.150, Village – Charoli Bk. for a consideration of Rs.9,60,00,000/-. He noted that the said land was never shown by the assessee in her wealth tax return as investment. Further, the said land was purchased by the assessee on 26.11.2007 for Rs.6,21,90,000/- and after claiming cost of selling of Rs.4,57,000/- and indexed cost of acquisition of Rs.9,61,63,122/-, the assessee has shown long term capital loss of Rs.6,20,122/-. The Assessing Officer further noted that the assessee is a partner / director in many concerns which are engaged in real estate business. She is regularly purchasing lands and selling them at high profits. Even in the earlier year relevant to assessment year 2012-13, the assessee has sold her open land situated at Survey No.36, Yeolewadi, Pune on 20.10.2011 for a sale consideration of Rs.7,81,00,711/- and had shown as long term capital gain of Rs.6,34,01,864/-. The assessee had claimed exemption u/s 54F of the Act which was disallowed in the assessment order. Thus, the assessee does these land sale-purchase transactions and termed them as investments instead of stock in trade for claiming profits thereupon as long term capital gain and either claims exemption u/s 54F or ends up claiming capital loss by taking undue benefit of indexation provisions rather than offering the said profits to tax as her business profits. He further noted that the land at Charoli was purchased by the assessee not from her own funds but entirely with borrowed 3 ITA No.1554/PUN/2024 funds. He, therefore, asked the assessee to explain as to why the income on account of sale of Charoli land should not be taxed as business income of the assessee. 4. It was submitted by the assessee that the land at Charoli is an agricultural land and therefore, it was not included in the wealth tax return filed for assessment year 2013-14 as per Wealth Tax Act. However, as per the Income Tax Act, Charoli land is a capital asset and the capital gain arising on such land has been derived and tax has been paid by the assessee for assessment year 2013-14. The assessee has not purchased the property for purpose of business or profession, therefore, income that has arisen from the sale of the land has been charged under capital gain. 5. However, the Assessing Officer was not satisfied with the arguments advanced by the assessee. According to him, the dominant intention of the assessee in this transaction of purchase and sale of land is to earn profit. Following the decision of the Hon'ble Supreme Court in the case of G. Venkataswami Naidu & Co. vs. CIT, 35 ITR 594 (SC), the Assessing Officer held that the profit on sale of land at Charoli is business profit. Accordingly, rejecting the long term capital loss on sale of Charoli land at Rs.6,20,122/-, he made addition of Rs.3,33,53,000/- as business income and determined the total income of the assessee at Rs.4,05,01,938/-. 4 ITA No.1554/PUN/2024 6. In appeal, CIT(A) / NFAC deleted the addition made by the Assessing Officer by observing as under: “6. Adjudication 6.1 The only Ground of Appeal taken by the appellant is 1. The Ld. AO erred in treating sale of land by the appellant as an adventure in the nature of trade and taxing it as business income instead of long term capital gains and thereby denying benefit of indexation of cost of acquisition to the appellant. The appellant therefore pleads Your Honor to kindly direct the Ld. AO to treat the income from sale of land as long term capital gain and to allow the benefit of indexation of the cost of acquisition to the appellant. 6.2 The assessing officer has made the addition by treating the sale of land as business income. The assessing officer has observed in his order that \"On perusal of the facts surrounding this transaction, it is seen that the assessee is partner/Director in many a concerns which are engaged in real estate business. She is regularly purchasing lands and selling them at high profits. Even in the earlier year relevant to A.Y. 2012-13, the assessee has sold her open Land situated at Survey no.36, Yeolewadi, Pune on 20/10/2011 for a sale consideration of Rs.7,81,00,711/- and had showed long term capital gain of Rs.6,34,01,864/ out of the sale It was claimed to be exempt u/s. 54F however the said claim was disallowed in the assessment order. Thus, it is seen that the assessee does this land sale-purchase transactions and term them as investments (instead of stock in trade) for claiming profits thereupon as LTCG and either claims exemption u/s. 54F etc. (as done for A. Y. 2012-13) or ends up claiming capital loss by taking undue benefit of Indexation provisions (as done for A.Y. 2013-14), rather than offering the said profits to fax as her business profits.\" 6.3 The appellant has replied on the issue by saying that \"The assessee submits that the action of the learned A.O. in making the addition is not justified at all. It is to be noted that the land at Charoli was acquired on 26.11.2007. The said land was sold on 15.03.2013. Accordingly, the assessee has held the said land for more than 5 years. It is not a case that the assessee has purchased the land and sold it within a short span of time. 5] The learned. A.O. has stated that the assessee had purchased the land from borrowed funds. It is submitted that the assessee had taken money from L. K. Jain HUF wherein she is a member. The assessee had not paid any interest on the said amount to L. K. Jain (HUF). Thus, it is not a case wherein the assessee has borrowed 5 ITA No.1554/PUN/2024 money and paid interest thereon. The assessee has taken money from the HUF wherein she is a member and therefore, the said amount cannot be termed as loan in real sense. 6] The learned A.O. has further stated that the assessee has not shown the said land in Wealth Tax Return. In this context, it is submitted that the said land was an agricultural land and therefore, the assessee was not liable to pay Wealth tax in respect of the said land. This fact was also clarified by the assessee to the learned A.O. in the asst. proceedings. Accordingly, since the said land was agricultural land the question of declaring the same in the Wealth Tax simply did not arise. Accordingly, this objection of the learned A.O does not have any merit. 7] The learned A.O. has further stated that the assessee had also sold land in A.Y. 2012-13 and long-term capital gain was offered on the said land. According to him, he has further noted that the claim of exemption u/s 54F was denied. The assessee submits that she had sold land in A.Y. 2012-13 and the gain thereon was offered as long- term capital gain. The said gain was taxed as long-term capital gain by the learned A.O. in the asst. order. Thus, it is to be appreciated that the gain on sale of land in A.Y. 2012-13 was accepted as long- term capital gain and it is not a case that the said gain was taxed as business income of the assessee. Accordingly, the assessee would like to submit that once the gain on sale of land has been taxed as long-term capital gain in A.Y. 2012-13, the question of treating the gain as business income in the current year simply does not arise. It is also to be appreciated that the claim of exemption u/s 54F which was denied in A.Y. 2012-13 was allowed by Hon'ble ITAT Accordingly, on the principle of consistency, the assessee submits that the leamed A.O should have accepted the claim of the assessee that the gain arising on sale of Charali land was assessable under the head \"Capital Gain\" ME TAX DEPART 8] The learned A.O. has further stated that the assessee is a partner/director in concerns which are engaged in real estate business. In this context, it is to be appreciated that simply because the assessee is a partner / director in concerns engaged in real estate business does not mean that the transactions entered into in her individual capacity or also to be considered as business income. It is a settled law that as individual can hold certain assets of the same class as an investment as well as stock in trade. For this proposition, the assessee places reliance on the following decisions 1. CIT v. Gopal Purohit [336 ITR 287 (Bom)] 2. CIT v. Yatish Trading Co. Pvt. Ltd. [359 ITR 320] 3. CIT v. Madan Gopal Radhey Lai [73 ITR 652] 6 ITA No.1554/PUN/2024 9] In the present case, the assessee in her individual capacity has held the lands as capital asset. Now, simply because the assessee is a partner/director in concerns engaged in real activity does not mean that the transaction undertaken by her in her individual capacity are also to be treated as business income. It is also to be appreciated that in A.Y. 2012-13 the assessee has sold her land and the gain thereon was offered to tax as long-term capital gain and the said claim was accepted by the learned A.O. in the asst. proceedings. In view of the same, the assessee submits that the gain arising on sale of Charoli land has been wrongly taxed as business income of the assessee. 6.4 Thus the contention of the appellant is found to be correct as even in previous year 2012-13 and succeeding year i.e. 2014-15 the gain from sale of land has been taxed as capital gain. The land was an agricultural land which has been conclusively proved by the appellant and thus it was not shown in the wealth tax return. 6.5 The Assessing Officer has further stated that the appellant was a partner/ Director in concerns which are engaged in real estate business. The appellant objected to this contention of the A.O. that simply because she is a partner/director in concerns engaged in real estate business does not indicate that the transactions entered into by the appellant in her individual capacity are to be considered as the business transaction. The appellant further submitted that an individual can hold certain assets of the same class as an investment as well as stock in trade. For this proposition, the appellant relied upon the following decisions- a. CIT v/s.Gopal Purohit 1336 ITR 287(Bom)] b. CIT v/s. Yatish Trading Co. Pvt. Ltd. [359 ITR 320(Bom)] c. CIT v/s. Madan Gopal Radhey Lal [73 ITR 652 (SC)] Thus simply because the appellant was a partner/director in concerns which are engaged in real estate activity cannot be a ground to hold that the transaction of sale of land in her individual capacity would take the same colour from the transactions of the firms/companies in which the appellant is a partner/director. In this case, the appellant held the land for more than five years. If the intention of the appellant was to trade in land, she would have acquired the said land in the partnership firm/ company in which she was a partner/director. The very fact that the land was purchased in the individual name clearly shows that the intention was to keep the land as a owner of the property. 6.6 The Assessing Officer has further held that the appellant has purchased the land from borrowed fund. On this issue, the appellant contended that the said land was purchased by her from the money taken from LK Jain (HUF) 7 ITA No.1554/PUN/2024 wherein she is a member. It is also clarified by the appellant that she has not paid any interest on the said amount taken from LK Jain (HUF). Thus, it is not a case wherein the appellant has borrowed money from some outsider and paid interest. She has taken the money from the HUF of which she is a member and there is no payment of interest by her. Accordingly, there is no substance in the said issue raised by the Assessing Officer. 6.7 The Assessing Officer further holds in A.Y. 2012-13 also the appellant had sold her land and claimed exemption u/s 54F. The Assessing Officer has held that in A.Y. 2012-13, the claim of exemption u/s 54F was denied and according to him, the appellant carries out such transactions and offers the gain thereon as capital gain even though, the same is taxable as a business income. On this issue, the appellant argued that in Assessment Year 2012- 13, she has sold her land and offered the gain as long term capital gain. It was submitted by the appellant that for A. Y. 2012-13 the claim of exemption u/s 54F was rejected but the gain on sale of the land which was offered as long term capital gain was accepted by the Assessing Officer as long term capital gain. 6.8 The appellant further highlighted that in A.Y. 2014-15, she had also sold another land situated at S. No. 95, Village Charoli Bk the gain arising on sale of the said land was offered to tax as long term capital gain by the appellant. The assessment for A.Y.2014-15 has been completed u/s 143(3) and the claim of long term capital gain has been accepted in the said assessment year. 6.9 Once the gain in sale of land was accepted as long term capital gain in A.Y. 2012-13 by the Assessing Officer in scrutiny assessment order passed u/s 143(3) of the Act, there is no reason to adopt a different view for the year under consideration. There is no dispute that for A.Y. 2012-13, the appellant had sold her land at Yeolewadi and the gain on sale of the said land has been taxed as long term capital gain by the Assessing Officer. Accordingly, once the income on sale of land has been taxed as long term capital gain for the immediately preceding year by applying the principle of consistency, the Assessing Officer should have followed the same view and the gain on sale of the land should not have been taxed as business income of the appellant. It is also to be noted that for A.Y. 2014-15, the appellant had sold land and the gain thereon was offered as long term capital gain and accepted by the department. Thus, the facts emerge that for the immediately preceding and succeeding year, the appellant had sold land and the gain thereon was offered as capital gain and accepted in scrutiny assessment. 6.10 Hon'ble Supreme Court in the case of Radha Satsang [193 ITR321] has held that if a view has been taken by the department for a particular year, there is no reason to adopt a different view for another assessment year. Applying the same principle, the Assessing Officer has erred in treating the land at Charoli as a business asset and the appellant was justified in treating the same as a long term capital asset. 8 ITA No.1554/PUN/2024 6.11 It is further noted that the appellant had purchased the land on 26.11.2007. The said land was sold by her vide sale deed dated 15.03.2013. Thus, it is seen that the appellant had held the same land for more than five years. No development activity has been carried out by the appellant on the said land. Thus there is substance in the claim of the appellant that she has held the land for more than five years. In this context, reliance is placed on the decision of ITAT Pune in the case of ITO v. Bajuio Investment Pvt.Ltd. [127TTJ 423] wherein the assessee own land jointly with another company. The assessee held the land for more than 10 years. However, the assessee had received sanction for development of the land. In that case, the assessee sold the land and had offered long term capital gain. The Assessing Officer had treated the same as a business Income. Hon'ble ITAT held that the assessee had not uridertaken any development activity on the said land and as the said land was held for more than 10 years, the gain arising was taxed as long term capital gain by Hon'ble ITAT. This decision of Hon'ble ITAT has been confirmed by Hon'ble Bombay High Court vide order dated 24.01.2013- ITA No. 998 of 2011. 6.12 The Assessing Officer has referred to the decision of Hon'ble Supreme Court in the case of G Venkataswami Naidu & Co. Vs CIT (35 ITR 594) in support of his stand that the gain arising on sale of land is taxable as business income and not as long term capital gain. In the case before Hon'ble Supreme Court, the assessee firm was acting as a managing agent of Janardana Mills Ltd. The assessee bought four contiguous plots of land under four sale deeds. Subsequently, the assessee firm sold the said plots in two lots to Janardana Mills Ltd. The gain arising on sale of the plots was taxed as business income by the Assessing Officer. Hon'ble Supreme Court held that if the asset was purchased solely and exclusively with an intention to resale at a profit it would be a strong factor indicating that the transaction is an adventure in the nature of trade. As stated above, the appellant had sold the land after holding it for more than five years. This fact would prima facie go to show the intention of the appellant to hold the land as an investment. The Assessing Officer has failed to bring on record any material to prove that the said land sold was a stock in trade. The onus is on the Assessing Officer to bring on record relevant material to prove that the transaction was an adventure in the nature of trade. In the present case, the Assessing Officer has failed to bring on record any evidence to prove that the land sold was adventure in the nature of trade and accordingly, the action of the A.O. in treating the transaction as a business transaction is hereby rejected. 6.13 In view of above, considering the fact that the appellant has held the land for more than five years and further, in A.Y.2012-13 and 2014-15, the gain on sale of land has been taxed as long term capital gain, the claim made by the appellant is justified and the addition made by treating the said transactions as the business transaction is hereby deleted.” 9 ITA No.1554/PUN/2024 7. Aggrieved with such order of CIT(A) / NFAC, the Revenue is in appeal before the Tribunal by raising the following grounds: 1. Whether on the facts and in the circumstances of the case & in the law, the CIT(A) is correct in deleting the addition made by the AO amounting to Rs.3,33,53,000/- on account of treating sale-purchase of land by the assessee as a business transaction completely disregarding the findings of the AO on the impugned issue? 2. Whether on the facts and in the circumstances of the case & in the law, the CIT(A) erred in holding that the assessee was indeed holding the said land as an investment instead of stock-in-trade merely for the reason that the said property was held by the assessee for a period of five years? 3. Whether on the facts and in the circumstances of the case & in the law, the CIT(A) has erred in allowing the contention raised by the assessee vis-à-vis treatment of gains / losses earned from the sale transaction of land without admitting the factual position that the assessee is engaged in real estate business and has been regularly selling/ purchasing lands? 4. Whether on the facts and in the circumstances of the case & in the law, the CIT(A) has erred in disregarding the decision of the Hon'ble Supreme Court in G. Venkataswami Naidu & Co. v/s CIT (35 ITR 594) wherein it has been held that if the asset was purchases solely and exclusively with an intention to resale at a profit it would be a strong factor indicating that the transaction is an adventure in the nature of trade? 8. The Ld. DR heavily relied on the order of the Assessing Officer and submitted that the CIT(A) / NFAC has not properly addressed the issue and has not given his finding on the issue of continuous buying and selling of the land by the assessee. He submitted that the order of the CIT(A) / NFAC be reversed and that of the Assessing Officer be restored. 9. The Ld. Counsel for the assessee on the other hand heavily relied on the order of the CIT(A) / NFAC and submitted that the assessee had purchased the land on 26.11.2007 and sold the same on 15.03.2013 i.e. after holding the same for 10 ITA No.1554/PUN/2024 more than five years. Further, no developmental activities had taken place on the said land. Merely because the assessee is a director in Kumar Builders and some other business concerns, it cannot be said that she cannot hold a capital asset as investment. Further, the assessee had never traded in any land and was holding the same as investment. So far as the allegation of the Revenue that the assessee had taken loan is concerned, he submitted that the assessee had taken loan from the HUF as a member of the HUF and has not paid any interest. Referring to the copy of the assessment order for assessment year 2012-13, which is placed at pages 13 to 21 of the paper book, he submitted that in that year also the assessee had sold a piece of land and had claimed deduction u/s 54F of the Act of Rs.6,34,01,864/-. The Assessing Officer rejected the claim of deduction u/s 54F of the Act and the exemption was finally allowed by the Tribunal. Similarly, during assessment year 2014-15 also, in the order passed u/s 143(3) of the Act, copy of which is placed at pages 22 to 24 of the paper book, no such disallowance has been made by the Assessing Officer on account of long term capital gain which was shown at Rs.20,03,319/- by treating the same as business income. He accordingly submitted that when the Assessing Officer in the preceding and succeeding assessment years has accepted the claim of long term capital gain made by the assessee on account of profit on sale of land, for the impugned assessment year, the Assessing Officer could not have deviated from the rule of consistency as held by the Hon'ble Supreme Court in the case of Radha Soami Satsang vs. CIT (1992) 193 ITR 321 (SC). 11 ITA No.1554/PUN/2024 10. Referring to the decision of Hon‟ble Bombay High Court in the case of CIT vs. Yatish Trading Co. (P.) Ltd. (2013) 35 taxmann.com 356 (Bom), he submitted that the Hon‟ble Bombay High Court in the said decision has held that it is open to the trader to hold shares as stock in trade as well as investments and once the shares sold were held by the assessee as investments, the gains arising out of the sale of investment were to be assessed under the head „capital gains‟ and not under the head „business profits‟. 11. Referring to the decision of the Pune Bench of the Tribunal in the case of JCIT vs. Adrus Estate and Properties LLP (2021) 130 taxmann.com 455 (Pune – Trib.), he submitted that the Tribunal in the said decision has held that where the assessee sold a land owned by it after holding it for a period of six years and same was shown as investment in its balance sheet and not as stock in trade and land was purchased out of its own funds and not out of borrowed funds, transaction of sale of land did not fall under the category of an „adventure in nature of trade‟ and, thus, profits arising on sale of land was to be treated as „capital gains‟ and not as „business income‟. 12. Referring to the decision of the Hon‟ble Bombay High Court in the case of CIT vs. Gopal Purohit (2011) 336 ITR 287 (Bom), he submitted that the Hon‟ble Bombay High Court in the said decision has held that it was open to the assessee to maintain two separate portfolios, one relating to the investment and another relating to business dealing in shares. Further, there should be uniformity in 12 ITA No.1554/PUN/2024 treatment and consistency when facts and circumstances for different years were identical and that entries in the books of account alone are not conclusive in determining the nature of income. 13. Referring to the decision of the Hon'ble Supreme Court in the case of CIT vs. Madan Gopal Radhey Lal, 73 ITR 652 (SC), he submitted that the Hon'ble Supreme Court in the said decision has held that a trader may acquire a commodity in which he is dealing for his own purposes and hold it apart from the stock in trade of his business. There is no presumption that every acquisition by a dealer in a particular commodity is acquisition for the purpose of his business; in each case the question is one of intention to be gathered from the evidence of conduct by the acquirer and his dealings with the commodity. 14. So far as the reliance on the decision of the Hon'ble Supreme Court in the case of G. Venkataswami Naidu & Co. vs. CIT (supra) by the Revenue is concerned, he submitted that the facts in that case are different from the facts of the present case. In that case before the Hon'ble Supreme Court the assessee firm was acting as managing agent of Janardana Mills Ltd. The assessee bought four contiguous plots of land under four sale deeds. Subsequently, the assessee firm sold the said plots in two lots to Janardana Mills Ltd. The gain arising on sale of the plots was taxed as business income by the Assessing Officer. Under these circumstances, the Hon'ble Supreme Court held that if the asset was purchased solely and exclusively with an intention to resale at a profit, it would be a strong 13 ITA No.1554/PUN/2024 factor indicating that the transaction is an adventure in the nature of trade. However, in the instant case, the assessee had sold the land after holding it for more than five years. This fact itself can show that the intention of the assessee was to hold the land as investment and nothing has been brought on record by the Assessing Officer to prove that the said land sold was stock in trade. He accordingly submitted that the decision relied on by the Assessing Officer is distinguishable and not applicable to the facts of the present case. He submitted that in the instant case the assessee has held the land for more than five years and in the preceding and succeeding assessment years, the Assessing Officer has accepted the treatment given by the assessee. Since the CIT(A) / NFAC has passed a very detailed order, the same should be upheld. 15. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed by both the sides. We have also considered the various decisions cited before us by both sides. We find the assessee in the instant case has sold her land at Survey No.150, Village – Charoli Bk. for a consideration of Rs.9,60,00,000/- which was purchased by her on 26.11.2007 for Rs.6,21,90,000/-. We find that after claiming cost of selling of Rs.4,57,000/- and indexed cost of acquisition at Rs.9,61,63,122/-, the assessee declared long term capital loss of Rs.6,20,122/-. We find the Assessing Officer treated the sale of land as an “adventure in the nature of trade” and taxed the same as business income as against “long term capital gain” declared by the assessee on the ground that the assessee has not shown the said 14 ITA No.1554/PUN/2024 land in wealth tax return, the assessee is a director in various companies which are engaged in real estate business, the assessee is continuously selling lands and claiming either deduction u/s 54F or paying the low tax by claiming them as capital gains and that intention of the assessee in these transactions of purchase and selling of land is to earn profit. Applying the decision of the Hon'ble Supreme Court in the case of G. Venkataswami Naidu & Co. vs. CIT (supra), the Assessing Officer held that the profit on sale of land at Charoli is business profit. 16. We find the Ld. CIT(A) / NFAC relying on various decisions and the submission of the assessee allowed the appeal filed by the assessee holding the land to be a capital asset eligible for indexation benefit. He further noted that the Assessing Officer in the orders passed u/s 143(3) of the Act in the preceding and succeeding year has accepted the claim of the assessee on such profit from sale of land as capital gain. Therefore, the Assessing Officer could not have treated the said land at Charoli as business asset as against capital asset treated by the assessee. He further noted that the assessee had held the land for more than five years and no developmental activity has been carried out by the assessee in the said land and therefore, in absence of any evidence brought on record by the Assessing Officer to prove that the said land was sold as stock in trade, the decision of the Hon'ble Supreme Court in the case of G. Venkataswami Naidu & Co. vs. CIT (supra) relied on by the Assessing Officer is not applicable to the facts of the present case. 15 ITA No.1554/PUN/2024 17. We do not find any infirmity in the order of the Ld. CIT(A) / NFAC on this issue. Admittedly, the land in question was purchased by the assessee on 26.11.2007 and sold on 26.03.2013 i.e. after holding it for a period of more than five years. It is also an admitted fact that even after holding the land for more than five years, no developmental activity has been taken place. The submission of the assessee before the lower authorities that the land at Charoli is an agricultural land and therefore, it was not included in the wealth tax return filed for the assessment year 2013-14 as per the Wealth Tax Act, could not be controverted by the Ld. DR. It is also an admitted fact that the assessee has not borrowed any money on which the interest has been paid and the assessee has taken loan from L K Jain, HUF in which she is a member. We, therefore, find merit in the submission of the Ld. Counsel for the assessee that the said loan cannot be termed as loan in real sense. 18. We further find that during the assessment year 2012-13 the assessee has sold a piece of land and offered the profit as long term capital gain out of which the assessee claimed deduction u/s 54F of the Act and which was denied by the Assessing Officer. However, when the matter travelled to the Tribunal, the Tribunal allowed the claim of deduction by the assessee u/s 54F of the Act. Thus, the claim of long term capital gain on account of sale of land in assessment year 2012-13 has been accepted by the Revenue. Similarly, for assessment year 2014- 15 also, the claim of the assessee of capital gain on account of sale of land by the assessee was accepted by the Assessing Officer himself in the order passed u/s 143(3) of the Act. Merely because the assessee is a partner / director in the 16 ITA No.1554/PUN/2024 concerns which are engaged in real estate business does not mean that the transactions entered into in her individual capacity shall be considered as business income. 19. We find the Hon‟ble Bombay High Court in the cash of CIT vs. Gopal Purohit (supra) has held that it was open to the assessee to maintain two separate portfolios i.e. one relating to the investment and another relating to business dealing in shares. It has been held that there should be uniformity in treatment and consistency when facts and circumstances for different years were identical and that entries in the books of account alone are not conclusive in determining the nature of income. 20. We find the Hon'ble Supreme Court in the case of CIT vs. Madan Gopal Radhey Lal (supra) has held that a trader may acquire a commodity in which he is dealing for his own purposes and hold it apart from the stock in trade of his business. There is no presumption that every acquisition by a dealer in a particular commodity is acquisition for the purpose of his business; in each case the question is one of intention to be gathered from the evidence of conduct by the acquirer and his dealings with the commodity. 21. Since the assessee in the instant case has held the land for more than five years without carrying out any developmental activity on the same, the Revenue in the preceding and succeeding assessment years has accepted the treatment of the 17 ITA No.1554/PUN/2024 assessee in claiming the long term capital gain on account of sale of land even though she was also a director in various concerns at that time, therefore, in view of the above discussion and in view of the detailed reasoning given by the Ld. CIT(A) / NFAC on this issue, we do not find any infirmity in his order deleting the addition made by the Assessing Officer. Accordingly, the same is upheld and the grounds raised by the Revenue are dismissed. 22. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open Court on 19th November, 2024. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 19th November, 2024 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. 5. The concerned Pr.CIT DR, ITAT, „A‟ Bench, Pune गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune 18 ITA No.1554/PUN/2024 S.No. Details Date Initials Designation 1 Draft dictated on Sr. PS/PS 2 Draft placed before author Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order "