Mrs. Sunanda Ulhas Chaudhary, Jalgaon V. ITO, Ward 2(1), Jalgaon, Jalgaon

ITA 1492/PUN/2008

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56460 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 17-11-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Earning of tax free income; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 54B; 147; 131; 148; 54; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRAKUMAR YADAV, JUDICIAL MEMBER AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.1492/PN/2008 (ASSESSMENT YEAR: 2003-04) MRS.SUNANDA U.CHAUDHARY 55, SHIVRAM NAGAR, NEAR SOFT AID COMPUTERS JALGAON, PAN AAJPC8137Q .. A PPELLANT VS. INCOME TAX OFFICER, WARD 2(1), JALGAON .. RESPON DENT APPELLANT B Y: SHRI SUNIL GANOO RESPONDENT BY: SHRI HEMANT LUVA, SR AR ORDER PER D.KARUNAKARA RAO, AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) II, NASHIK DT. 19-9-2008 FOR THE ASSESSMENT YEAR 2003-04. 2. ASSESSEE RAISED THE FOLLOWING GROUNDS IN THIS AP PEAL. 1. IN THE ABSENCE OF CONDITIONS PRECEDENT FOR ISSUANCE OF NOTICE U/S 148 OF THE INCOME TAX ACT, 1961, THE IMPUGNED REASSESSMENT ORD ER BEING BAD IN LAW, VOID AB INITIO AND PATENTLY ILLEGAL, THE LEARNED CIT(A) OUGHT TO HAVE ANNULLED/CANCELLED/VACATED THE IMPUGNED REASSESSMEN T ORDER. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD.CIT(A) HAS GROSSLY ERRED IN HOLDING THAT ON TRANSFER OF AGRICU LTURE LAND SITUATED AT S.NO.145/3 KANDARI SHIVAR, BHUSAWAL ON 21-3-2003, T HE APPELLANT ASSESSEE HAS EARNED SHORT TERM CAPITAL GAINS OF RS.9,68,000 AND HAS FURTHER ERRED IN DIRECTING THE AO TO TAX THE SAME AS SHORT TERM C APITAL GAINS. WHILE DOING SO, THE LD.CIT(A) HAS MISERABLY FAILED TO APPRECIAT E THAT THE IMPUGNED LAND BEING AGRICULTURE LAND AND BEING OUTSIDE THE SCOPE AND PURVIEW OF SEC.2(14) OF THE I.T. ACT, 1961, THE GAINS ON TRANS FER OF THE SAID LAND ARE EXEMPT FROM INCOME TAX. IT MAY PLEASE BE HELD THAT GAINS EARNED BY THE APPELLANT FROM THE TRANSFER OF THE SAID LAND ARE EXEMPT FROM TAXATION. 3. DURING THE PROCEEDINGS BEFORE US, LD AR FOR THE ASS ESSEE FILED A REQUEST FOR ADMISSION OF AN ADDITIONAL GROUND AND THE SAME READ AS FOLLOWS. WITHOUT PREJUDICE TO THE GROUNDS 1 AND 2 AND BY WAY OF AN ALTERNATE CLAIM THE APPELLANT ASSESSEE SUBMITS THAT THE DEDUCTION U/S 54 B OF THE ACT 1961 MAY PLEASE BE GRANTED TO THE APPELLANT WHILE CALCULATIN G THE CAPITAL GAINS ON SALE OF AGRICULTURE LAND AS THE APPELLANT HAS PURCHASED ANO THER AGRICULTURE LAND WITHIN THE PRESCRIBED STATUTORY TIME LIMIT AND THE NECESSA RY PRESCRIBED CONDITIONS ARE SATISFIED BY THE APPELLANT AND ALL THE NECESSARY DE TAILS ARE ALREADY AVAILABLE ON THE RECORDS OF THE LEARNED ASSESSING OFFICER. MRS.SUNAND A U.CHAUDHARY 4. FROM THE ABOVE, THERE ARE THREE ISSUES NAMELY (I ) VALIDITY OF THE REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT; (II) I F THE LAND IN QUESTION IS AGRICULTURAL LAND OR A SHORT TERM CAPITAL ASSET AND THE SALE TRANSACTION CONSTITUTES ADVENTURE IN THE NATURE OF TRADE OR NOT ; AND FINALLY (III) IF IT IS A CAPITAL ASSET, IF THE ASSESSEE IS ELIGIBLE FOR CLAI M OF DEDUCTION U/S 54B OF THE ACT? WE SHALL TAKE UP AND DISCUSS THESE ISSUES IN T HE FOLLOWING PARAGRAPHS OF THIS ORDER AND THE MOOT ISSUE AT SL NO (II) ABOVE I S TAKEN UP FIRST. I. IF THE LAND IN QUESTION IS AGRICULTURAL LAND OR A S HORT TERM CAPITAL ASSET AND THE SALE TRANSACTION CONSTITUTES ADVENTURE IN THE NATURE OF TRADE OR NOT 5. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE OWNS LAND AND THE SAME WAS TRANSFERRED BY WAY OF SALE. IN THE OPINION OF THE ASSESSEE, THE LAND IS AGRICULTURAL LAND AND THEREFORE, IT IS NOT A CAPITAL ASSET AND THE PROFIT EARNED ON TRANSFER OF THE SAME SHOULD CONSTI TUTES AN EXEMPT INCOME. DURING THE ASSESSMENT PROCEEDINGS, AO MADE ENQUIRIE S AND CAME TO THE CONCLUSION THAT IMPUGNED LAND IS NOT AGRICULTURAL I N NATURE. AO HELD THAT THE SALE TRANSACTION CONSTITUTES AN ADVENTURE IN THE NATURE OF TRADE. ON CONSIDERING THE FACT THAT THE ASSESSEE DISCLOSED AN AGRICULTURAL INCOME RS 15,000/- IN THE RETURN, A.O. REQUESTED THE ASSSESSE E TO PROVIDE THE COMPLETE DETAILS ABOUT (I) THE CROPS GROWN; (II) EXPENSES IN CURRED FOR RAISING THE CROPS; AND (III) EVIDENCE IN SUPPORT OF THE RECEIPT OF THE AGRICULTURAL RECEIPTS. THE ASSESSEE WAS UNABLE TO GIVE ANY SATISFACTORY REPLY TO THE A.O. THE ASSESSEE CLAIMED THAT SINCE THE AGRICULTURAL INCOME WAS EXEM PT, SHE WAS UNDER A BONA FIDE BELIEF HENCE NO DETAILS WERE MAINTAINED AND CO MPLETE INFORMATION WAS NOT AVAILABLE WITH HER. IT WAS MENTIONED THAT SHE CULTIVATED THE LAND DIRECTLY AND EARNED AN AGRICULTURAL INCOME OF R.15,000. HOWE VER, THE ASSESSEE FILED THE 7/12 EXTRACTS AS EVIDENCE IN SUPPORT OF EVIDENC ING HER CLAIMS. 6. THE ASSESSEE WAS GIVEN A FURTHER OPPORTUNITY OF SUBMITTING THE FOLLOWING DETAILS. I. WHEN THEY PURCHASED THE LAND WHETHER THERE WERE ANY CROPS ON THE LAND IF SO THE DETAILS. II. WHO CULTIVATED THE LAND, I.E. SELF OR BY TENANT III. WHETHER THERE WAS ANY CROP WHEN THE LAND WAS SOLD. IV. ANY EVIDENCE OTHER THAN 7/12 EXTRACTS TO PROVE THAT THE LAND WAS ACTUALLY CULTIVATED. THE ASSESSEE COULD NOT PRODUCE THE COMPLETE DETAILS ON THE ABOVE POINTS TO THE SATISFACTION OF THE A.O. FROM THE DETAILS ON 7/ 12 EXTRACT, AO NOTICED THAT NILGIRI AND MOONG WERE SAID TO HAVE BEEN GROWN DURING THE YEAR 2003- 04. FOR VERIFYING THE VARACITY OF THESE DETAILS, AO SUMMONE D THE PURCHASER OF THE LAND SHRI PRAVIN BALAKRISHNA CHAUDHARY U/S 131 OF T HE ACT AND RECORDED A MRS.SUNAND A U.CHAUDHARY STATEMENT WHEREIN, THE PURCHASER STATED THAT THERE WAS NO EVIDENCE OF ANY CROP GROWN ON THE SAID LAND AND THE LAND WAS FILLED WITH ONLY GRASS AT TIME OF SALE. OTHER REVELATIONS FROM THE SAID STATEMENT INCLUDE THAT THE SAID LAND WAS PURCHASED APPLIED AND OBTAINED CERTIFICATE OF N ON AGRICULTURAL (N.A.) AND PLOTTED THE LAND INTO HOUSING PLOTS AND IT WAS NEVE R MEANT FOR CULTIVATION. IT WAS ALSO STATED BY HIM THAT THE LAND WAS DEVELOPED WITHIN TWO MONTH FROM TAKING POSSESSION OF THE SAME. OTHER ENQUIRY BY TH E AO INVOLVES SUMMONING OF THE TALATI IN ORDER TO VERIFY THE GENUINENESS OF THE CONTENTS OF THE 7/12 EXTRACTS, THE ASSESSING OFFICER SUMMONED THE TALATH I OF KANDARI SHIVAR AND EXAMINED HIM ON OATH U/S 131 OF THE ACT AND A STATE MENT WAS RECORDED. DURING THE COURSE OF EXAMINATION, THE TALATHI STATE D THAT THE REMARKS ABOUT THE CROPS GROWN IN THE 7/12 EXTRACTS ARE GENERALLY PLACED AFTER VISITING THE LAND AND AS PER THE INFORMATION PROVIDED BY THE OWN ER OF THE LAND. THE ASSESSING OFFICER CONFRONTED WITH THE TALATHI THAT THE CONTENTS OF THE 7/12 EXTRACTS ARE PROVED TO BE INCORRECT IN RELATION TO THE YEAR 2003-04 AS THE PURCHASER STATED THAT THERE WAS NO CROP ON THE SAID PIECE OF LAND WHEN IT WAS PURCHASED. TALATHI COULD NOT EXPLAIN PROPERLY STATI NG THAT HE WAS NOT THE TALATHI DURING THE SAID PERIOD . IN VIEW OF THESE CONTRADICTORY STATEMENTS, THE ASSESSING OFFICER CONCLUDED THAT THE CONTENTS O F THE 7/12 EXTRACTS IN THIS PARTICULAR CASE CANNOT BE TAKEN AS ACCEPTABLE EVIDE NCE. THEREFORE, THE ASSESSING OFFICER REJECTED THE ASSESSEES CLAIM THA T THE SAID LAND AS CULTIVATED. THE A.O. STATED THAT THE ASSESSEE ALSO WAS UNABLE T O GIVE ANY DETAILS ABOUT THE EXPENDITURE INCURRED OR INCOME EARNED BY WAY OF SALE ETC., FOR PROVING THAT THERE WAS CULTIVATION ON THE AID LAND. IN VIE W OF THIS, THE A.O. DECIDED THAT THE SAID LAND WAS PURCHASED IN YEAR 2000 ONLY TO SELL IT AT PROFIT AND NOT TO CULTIVATE AND THEREFORE, THE SAID SALE CONSTITUT ES AN ADVENTURE IN THE NATURE OF TRADE. GIST OF HIS REASONS ARE GIVEN IN THE ORDE R OF THE AO. 7. THE REASONS FOR THE SAME AREAS FOLLOWS. I. ASSESSEE IS NOT AN AGRICULTURIST . SHE DID NOT HOLD ANY AGRICULTURAL LAND PRIOR TO PURCHASE OF THE ABOVE LAND. II. AS CONCLUDED ABOVE ASSESSEE HAS NOT CULTIVATED THE AGRICULTURAL LAND. THE CIRCUMSTANCES DISCUSSED EARLIER INDICATE THAT ASSESSEE HAD PURCHASED THE LAND WITH THE SOLE INTENTION TO SELL IT IN IMMEDIATE FUTURE AND NOT TO TILL/CULTIVATE IT. III. THE LAND IS JUST WITHIN 1 KM FROM THE BHUSAWAL MUNI CIPAL LIMIT AND IT IS LOCATED IN THE ZONE MARKED FOR RESIDENCE . THUS, PURCHASE OF AGRICULTURAL LAND IN THE RESIDENTIAL ZONE ONLY INDI CATES THAT THE SAME WAS PURCHASED WITH THE SOLE INTENTION TO SELL IT IN NEAR FUTURE AT A PROFIT. IV. THE SALE OF AN AGRICULTURAL LAND AT SUBSTANTIALLY HIGH PRICE WITHIN 27 MONTHS OF ITS PURCHASE AND SUBSEQUENT PURCHASE O F ANOTHER AGRICULTURAL LAND ON THE VERY SAME DAY OF SALE OF T HE EARLIER AGRICULTURAL LAND IS SUFFICIENT EVIDENCE/INDICATOR THAT ASSESSEE IS INDULGING IN THE ACTIVITY OF BUYING AND SELLING OF LAND WITH THE MOTIVE MRS.SUNAND A U.CHAUDHARY TO EARN INCOME/PROFIT AND IS THEREFORE ADVENTURE IN THE NATURE OF TRADE. V. IMMEDIATE ON SALE/TRANSFER OF THE LAND, THE PURCHASER HAS CONVERTED THE LAND INTO NON-AGRICULTURE AND DIVIDED IT INTO COMMERCIAL/RESIDENTIAL PLOTS WHICH EXHIBIT THE COMM ERCIAL POTENTIALITY OF THE LAND WHICH WAS HELD BY THE ASSE SSEE. THE ASSESSING OFFICER RELIED ON THE FOLLOWING DECIS IONS. KHAN BHADUR AHMED ALLADIN & SONS V. CIT (1968) 68 ITR 573 (SC); JANKI RAM BAHADUR RAM V. CIT (1965) 57 ITR 21 (SC); G.VENKATASWAMI & CO. V. CIT 35 ITR 594 (SC) FOR STRENGTHENING HIS DECISION. IN THE PROCESS, THE AO DISMISSED THE ASSESSEES SUBMISSION ENTIRELY. 8. AGGRIEVED WITH THE ABOVE DECISION OF THE ASSESS ING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). DURING THE PROCEEDINGS, ASSESSEE FILED WRITTEN SUBMISSIONS WHICH ARE DESCRIBED IN PA RAGRAPH 4.5 OF THE IMPUGNED ORDER. ON CONSIDERING THE ABOVE SUBMISSIO NS, THE CIT(A) DISMISSED THE GROUND OF INVALID ASSESSMENT RAISED BY THE ASSE SSEE FOR THE REASONS DESCRIBED IN PARAGRAPH 4.9 OF THE IMPUGNED ORDER OF THE CIT(A). FURTHER, THE CIT(A) APPROVED THE FINDING OF THE ASSESSING OFFICE R THAT THERE WAS NO AGRICULTURAL ACTIVITY ON THE AID PIECE OF LAND. FU RTHER, ON THE ISSUE WHETHER THE SALE OF THE SAID LAND IS AN ADVENTURE IN THE NA TURE OF A TRADE OR NOT, THE CIT(A) GAVE FULL DISCUSSION IN PARAGRAPH 5 OF THE I MPUGNED ORDER AND FINALLY APPROVED THE ASSESSING OFFICERS CONTENTION AND HEL D THAT THE SURPLUS ON THE SALE TRANSACTION OF THE LAND HAS TO BE TREATED AS C APITAL GAINS. 9. AGGRIEVED WITH THE SAME, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US QUESTIONING THE VALIDITY OF REASSESSMENT PROCEED INGS AND ALSO ON THE MERITS. LD COUNSEL FOR THE ASSESSEE FILED THE FOLLO WING SUBMISSIONS AND THEY GIVEN AS UNDER. A) THE LAND BEARING S.NO.145/3 OF KANDARI, TAL.BHUSAWA L IS PURCHASED BY THE ASSESSEE ON 12-10-2000, WITH THE INTENTION TO C ULTIVATE THE LAND. THE SAID LAND IS ASSESSED TO LAND REVENUE AND IN RE CORD OF LAND REVENUE, IT IS CLASSIFIED AS AGRICULTURE LAND. B) ASSESSEE HAD CULTIVATED THE SAID LAND FROM THE DATE OF ITS PURCHASE UNTIL THE DATE OF SALE. THIS LAND IS SITUATED IN T HE AREA OF VILLAGE KANDARI THAT IS AWAY ABOUT 2 TO 3 KM FROM THE JURIS DICTION OF BHUSAWAL MUNICIPAL COUNCIL. THE SAID LAND IS ASSESSED TO LA ND REVENUE AND IN RECORD OF LAND-REVENUE, LAND. C) THE LAND BEING AGRICULTURAL LAND AND SITUATED OUTSI DE THE MUNICIPAL JURISDICTION/LIMIT IT IS OUTSIDE THE PURVIEW OF THE DEFINITION OF CAPITAL ASSET LIABLE TO TAX, AS CONTEMPLATED IN THE PROVISI ON OF SEC. 2(14)(III)(A) OF THE I.T.ACT. D) THERE IS A CERTAIN EVIDENCE IN FORM OF 7/12 EXTRACT THAT THE LAND HAS BEEN CULTIVATED BY THE ASSESSEE AND HAS TAKEN THE C ROPS CITED SUPRA. E) THE LAND WAS PURCHASED AS AN INVESTMENT WITH INTENT ION TO CULTIVATE IT AND NEVER HELD AS STOCK IN TRADE OR AS A BUSINESS ASSET. MRS.SUNAND A U.CHAUDHARY F) THE LAND WAS NEVER CONVERTED INTO STOCK IN TRADE OR ASSESSEE NEVER TRIED TO GET IT CONVERTED INTO NON-AGRICULTURE LAND . AS SUCH, LAND WAS RETAINED BY THE ASSESSEE AS A CAPITAL INVESTMEN T TILL IT WAS SOLD OUT. G) AS ALLEGED BY THE ASSESSING OFFICER, THE ASSESSEE N EVER CARRIED OUT ANY BUSINESS ACTIVITIES OF SALE AND PURCHASE OF AGRICUL TURE LANDS. THE SAID LAND WAS SOLD NOT WITH INTENTION TO MAKE PROFIT BUT IT HAD BECOME INCONVENIENT AND DIFFICULT TO CARRY OUT THE AGRICULTURE ACTIVIT IES IN THE SAID AREA DUE TO UNCONGENIAL CIRCUMSTANCES PREVAILI NG IN THAT AREA. H) IT IS PERTINENT TO NOTE THAT I.T.ACT PERMITTED AND M OTIVATED TO REINVEST THE SALE PROCEED OF AGRICULTURE LAND, IN PURCHASE O F NEW AGRICULTURE LAND, AS CAN BE SEEN AS MENTIONED IN THE SECTION 54 B OF THE ACT. AS SUCH, THE ASSESSEE REINVESTED THE PART SALE PROCEED S OF AGRICULTURAL LAND IN PURCHASE OF NEW AGRICULTURAL LAND. TO PURC HASE NEW AGRICULTURAL LAND DOES NOT MEAN, THAT ASSESSEE CARRIED OUT THE B USINESS OF SALE AND PURCHASE OF AGRICULTURAL LANDS. ON THE OTHER HAND, SHE HAD CONTINUED HER AGRICULTURAL ACTIVITY. IT IS PERTINENT TO NOTE THAT THERE IS NO PROHIBITION UNDER ANY LAW, TO REINVEST THE SALE PRO CEEDS OF AGRICULTURE LAND IN PURCHASE OF NEW AGRICULTURE LAND. THERE IS NO PROHIBITION IN ANY LAW, FOR TIME BEING IN FORCE, THAT ONE SHOULD NOT I NVEST MONEY RECEIVED IN AGRICULTURE LAND. UNDER THE INDIAN CONSTITUTION , EVERY CITIZEN IS HAVING FUNDAMENTAL RIGHTS HOLD/SALE ANY PROPERTY AT HIS/HER WISH. I) THE ASSESSEE HAD NEVER HAD ANY INTENTION TO MAKE TR ADING IN LANDS, AS ALLEGED BY THE ASSESSING OFFICER WITHOUT BRINGING A NY EVIDENCE ON RECORD. ASSESSING OFFICER MERELY ASSUME AND PRESUM E, AS PER HIS SWEET WILL, THAT ASSESSEE INDULGED IN SALE AND PURC HASE TRANSACTIONS OF AGRI. LANDS. HOWEVER, HE HAS NOT BROUGHT ANY EVIDE NCE IN THIS REGARD ON RECORD AND MADE OUT THE CASE IN HIS FAVOUR. J) THERE ARE NO OTHER INVESTMENTS MADE BY THE ASSESSEE EXCEPT THE PURCHASE AND SALE OF LAND CITED SUPRA. K) AS EXPLAINED ABOVE, THE CONCLUSION DAWN BY THE ASSE SSING OFFICER THAT THE ASSESSEE HAS NOT CULTIVATED THE LAND IS NOT AT ALL CORRECT. L) THE ASSESSEE HAS CULTIVATED THE AGRICULTURE LAND AN D SHOWN THE NET AGRICULTURAL INCOME. IT IS DULY SUPPORTED BY DOCUME NTARY EVIDENCE IN THE FORM OF 7/12 EXTRACT ISSUED BY THE STATE LAND R EVENUE AUTHORITY. ASSESSEE HAS SHOWN NET AGRICULTURE INCOME AT RS.15, 000/- NET AGRICULTURE INCOME SHOWN BY THE ASSESSEE BEING REAS ONABLE LOOKING TO THE SIZE OF AGRICULTURE LAND OWNED BY HER. MERELY, NON FURNISHING OF DETAILS OF EXPENDITURE INCURRED ON CULTIVATION CANN OT BE GROUND FOR TOTAL REJECTION OF CLAIM OF AGRICULTURE INCOME. IN VIEW OF THE TOTALITY OF FACTS AND CIRCUMSTANCES, THE AGRICULTURE INCOME SHOWN BY THE ASSESSEE IS CORRECT . M) THE ASSESSING OFFICER HAS NOT PROVED THAT THE SAID LAND WAS NOT CULTIVATED AND THERE WAS NO INTENTION TO CULTIVATE THE LAND. ON MERE ASSUMPTION AND PRESUMPTION BASIS, ASSESSING OFFICER HAS JUMPED UP TO CONCLUSION, THAT THE SURPLUS OF RS.9,68,000/- ON SA LE OF AGARI.LAND S.NO.145/3 AND HELD TO BE A PROFIT OF GAIN FROM BUS INESS OR PROFESSION AND TAXED IT. N) THE SURROUNDING LANDS ARE AGRICULTURE LAND. THUS P RESUMPTION WOULD BE IN FAVOUR OF HOLDING THAT THE LAND AGRICULTURAL LAND IN QUESTION WAS ALSO AGRICULTURAL LAND. O) MERE INCLUSION IN RESIDENTIAL ZONEBY TOWN PLANNERS DOES NOT MAKE THE LAND AS NON AGRICULTURAL LAND.IN THIS CONNECTION I WOULD LIKE TO DRAW YOUR HONOURS KIND ATTENTION TO THE CIRCULAR NO.2D (WT) OF 1960 DT.26- 02-1968, WHEREIN IT WAS CLARIFIED THAT THE LAND WHI CH IS COVERED BY THE TOWN PLANNING SCHEME MAY BE TREATED AS AGRICULTURAL LAND PROVIDED THE FOLLOWING CONDITIONS ARE SATISFIED. I) LAND REVENUE/AGRICULTURE CESS IS PAID II) AGRICULTURE OPERATIONS HAVE BEEN CARRIED OUT FROM Y EAR TO YEAR III) IT HAS NOT BEEN PUT TO NON-AGRICULTURE USE. MRS.SUNAND A U.CHAUDHARY ALTHOUGH THE ABOVE CIRCULAR APPLIES TO WEALTH TAX F OR GRANTING EXEMPTION U/S 2(E)(I) OF W.T.ACT, THE SAME CAN BE A PPLIED WITH EQUAL FORCE IN THE RELEVANT CIRCUMSTANCES ARISING UNDER I .T.ACT. KINDLY REFER TO THE FOLLOWING DECISIONS. A) CIT V. RAJA BENOY K SAHAS ROY (1957) 32 ITR 466 (SC ) B) SMT. SAARIFABIBI MOHAMED IBRAHIM AND OTHERS V. CIT (1993) 204 ITR 631 (SC) P) LAST BUT NOT THE LEAST, ASSESSEE WANT TO SUBMIT THA T THE INTENTION OF THE ASSESSEE HAS TO BE GATHERED FROM HIS CONDUCT AND CI RCUMSTANCES AND THE EVIDENCE AVAILABLE AND NOT BY SURMISES OR CONJE CTURES. THERE IS NO PRESUMPTION IN REGARD TO THE INTENT OF AN ASSESSEE BEING IN FAVOUR OF CARRYING ON A TRADE OR BUSINESS OR OTHERWISE. THE INTENTION OF THE ASSESSEE MUST ALWAYS BE CONSIDERED IN THE LIGHT OF THE VARIOUS ATTENDANT CIRCUMSTANCES, INCLUDING THE CONDUCT OF T HE ASSESSEE AND THE MANNER IN WHICH THE DEALING TAKES PLACE. CONSIDERING THE ENTIRE FACTS AND THE CIRCUMSTANCES OF THE CASE IN TOTALITY, IT IS AMPLE CLEAR THAT THE ASSESSEE HAS MADE THE INVES TMENT IN THE SAID LAND AND THERE IS NO INTENTION AT THE TIME OF PURCHASE O F THE LAND EXCEPT TO CULTIVATE THE SAME, AS IT IS EVIDENCED BY 7/12 EXTR ACT OF RECORD OF STATE LAND REVENUE. ON THE OTHER HAND, THE ENTIRE ACTION OF THE ASSESSING OFFICER IS BASED ON THE SURMISES OR CONJECTURES AND ON BASI S OF ASSUMPTION AND PRESUMPTION AND AT HIS SWEET WILL WITHOUT BRINGING ANY EVIDENCE ON RECORD. Q) IN VIEW OF THE ABOVE NARRATED FACTS AND IN THE CIRC UMSTANCES OF THE CASE THE CONCLUSION DAWN BY THE ASSESSING OFFICER I S NOT CORRECT ALL CORRECT AND TENABLE ON FACT AND IN LAW TOO. 10. ON THE OTHER HAND, LD DR FOR THE REVENUE ARGUED VEHEMENTLY STATING THAT THE ASSESSEE PURCHASED THE IMPUGNED LAND ON 12 -10-2000 AND SOLD THE SAME ON 21-3-2003 IE AY 2003-04. LD DR NOT ONLY OBJ ECTED TO THE ADMISSION OF THE ADDITIONAL GROUND RELATING TO THE CLAIM U/S 54B OF THE ACT BUT ALSO MADE VARIOUS PROPOSITIONS TO DEMONSTRATE THAT THE I MPUGNED LAND WAS NEVER USED FOR AGRICULTURAL PURPOSES. REGARDING THE CLAIM OF AGRICULTURAL INCOME, HE ALSO MENTIONED THAT THE DECLARATION OF R S 15,000/- IS MERELY A PAPER WORK AND THE SAME SHOULD BE IGNORED IN VIEW O F THE OTHER CONTRARY MATERIAL AVAILABLE ON RECORD. HE ALSO DISPUTED THE ASSESSEES RELIANCE ON THE 7/12 EXTRACT AND IT IS NOT CREDIBLE ONE NOT ONLY IN VIEW OF THE OTHER CONTRARY MATERIAL ON RECORDS BUT ALSO IN VIEW OF THE UNASCER TAINABLE NATURE OF THE SAID 7/12 EXTRACTS. TALATI OF THE REVENUE DEPARTMENT, MAHARASHTRA GOVERNMENT, WHO WAS SUMMONED BY THE REVENUE DISOWNED FROM THE R ECORDED CONTENTS ON THEM. AS PER THE DR, THE INFORMATION OR THE CONTENT S ON THE 7/12 EXTRACTS IS NOT CONCLUSIVE ABOUT THE USE OF LAND FOR AGRICULTUR AL PURPOSE AND RELIED ON THE APEX COURTS JUDGMENT IN THE CASE OF SMT.SAARIFABIBI MOHAMED IBRAHIM AND OTHERS (SUPRA) . LD DR FILED WRITTEN SUBMISSION TO DEMONSTRATE HIS POINT OF VIEW AND ARGUED VEHEMENTLY STATING THAT THE ORDER O F THE CIT(A) MUST BE CONFIRMED WITHOUT ANY MUTATIONS. MRS.SUNAND A U.CHAUDHARY 11. ON THE ISSUES (I) IF THE IMPUGNED LAND IS AGR ICULTURAL LAND THEREFORE, IT IS NOT A CAPITAL ASSET AND (II) IF THE IMPUGNED SALE T RANSACTION DATED 21.2.2003 CONSTITUTES ADVENTURE IN THE NATURE OF TRADE OR NOT , WE HAVE HEARD BOTH PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHO RITIES AS WELL AS THE PAPER BOOKS FILED BEFORE US. WE HAVE GONE THROUGH VARIOUS CITATIONS RELIED UPON BY SRI GANOO, THE LD COUNSEL FOR THE ASSESSEE AND ALSO SRI HEMANT LD DR FOR THE REVENUE. THE STAND OF THE ASSESSEE IS THAT THE LAND IN QUESTION IS AN AGRICULTURAL LAND WHEN PURCHASED AS WELL AS DURING THE HOLDING PERIOD. THE SAME IS REFLECTED AS AGRICULTURAL LAND IN THE LAND RECORDS. IF THE SAID LAND IS SUBSEQUENTLY CONVERTED IN TO NON AGRICULTURAL ONE B Y THE TRANSFEREE OF THE SAID LAND, THE ASSESSEE CANNOT BE HELD RESPONSIBLE FOR T HE SAME. ASSESSEE STRONGLY RELY ON (I) 7/12 EXTRACTS AND THE CONTENTS THEREIN AND DETAILS KEPT WITH THE REVENUE RECORDS RELATING TO PAYMENT OF LAND REVENUE ; (II) DECLARATION OF AGRICULTURAL INCOME ON THE RETURNS; (III) ASSESSEE BOOKS SHOWING THAT THE LAND IS SHOWN AS INVESTMENT AND NOT AS THE STOCK IN TRAD E (IV) OTHERS AS DETAILED IN THE PRECEDING PARAGRAPHS. THEREFORE, AS PER THE ASS ESSEE, THE SAID LAND IS AGRICULTURAL IN NATURE AND THE SALE TRANSACTION IS NOT AN ADVENTURE IN THE NATURE OF TRADE. 12. PER CONTRA, THE CASE OF THE REVENUE IS THAT THE ASSESSEE IS AN INDIVIDUAL AND SHE PURCHASED THE SAID LAND ON 12-10-2000 FOR A SUM OF RS 1.43 LAKHS AND SOLD THE SAME FOR RS.11,11,000 ON 21-3-2003 IE AFTER THE GAP OF 28 MONTHS. ASSESSEE EARNED THE PROFIT OF RS 9,68,000/- AND THE SAME WAS NOT DISCLOSED IN THE RETURN ON THE GROUND THAT IT IS NO T A CAPITAL ASSET.. THE FACT OF REINVESTMENT OF RS 2 LAKHS OUT OF THE SAID PROFITS ON THE OTHER LAND IS NOW RAISED AS AN ADDITIONAL GROUND BEFORE THE TRIBUNAL. THE SAID LAND WAS NEVER USED FOR AGRICULTURAL PURPOSE AS THE ASSESSEE IS NO T A AGRICULTURIST. AS PER THE REVENUE, THE SAID LAND IS LOCATED IN THE RESIDENTI AL ZONE MARKED BY THE LOCAL BODIES AND THERE IS NO WAY THERE IS A CONDUCTING AN Y AGRICULTURAL ACTIVITY IN THE SAID LAND, WHICH IS SURROUNDED BY THE RESIDENTI AL HOUSES. AS PER THE REVENUE, THE 7/12 EXTRACTS OF THE ASSESSEE ARE NOT DEPENDABLE AND IN ANY CASE, SUCH DOCUMENTS ARE INCONCLUSIVE AS PER THE JU DGMENT OF THE HONBLE APEX COURT IN THE CASE OF SMT.SAARIFABIBI MOHAMED IBRAHIM AND OTHERS (SUPRA). LD DR ATTEMPTED THE MAKE OUT THAT THE SAID JUDGMEN T HAS SET CERTAIN HELPFUL GUIDELINES TO TEST IF SOME LAND IS TO BE HE LD AGRICULTURAL OR OTHERWISE. THEREFORE, THE LD DR IS OF THE OPINION THAT THE SAI D LAND IS NON AGRICULTURAL IN NATURE AND TRANSACTION IN QUESTION SHOULD BE CONSTR UED AS AN ADVENTURE IN THE NATURE OF THE TRADE. MRS.SUNAND A U.CHAUDHARY 13. IN THE LIGHT OF OUR UNDERSTANDING OF THE DIVERG ENT POSITIONS OF THE PARTIES IN DISPUTE, WE HAVE EXAMINED THE SAID APEX COURTS JUDGMENT FOR DECIDING THE CLAIMS OF THE ASSESSEE. IN THIS REGARD , WE HAVE PERUSED THE WRITTEN SUBMISSION FILED BY THE LD DR AND THE SAID TABLE IS REPRODUCED AS UNDER: SMT. SARIFABIBI MOHMED IBRAHIM & ORS. VS. COMMISSIO NER OF INCOME TAX ~ (1993) 114 CTR (SC) 467 : (1993) 204 ITR 631 (SC) TESTS REMARKS 1 WHETHER THE LAND WAS CLASSIFIED IN THE REVENUE RECORDS AS AGRICULTURAL AND WHETHER IT WAS SUBJECT TO PAYMENT OF LAND REVENUE? LAND SEEMS TO BE REGISTERED AS AGRICULTURE IN THE LAND REVENUE RECORDS 2 WHETHER THE LAND WAS ACTUALLY OR ORDINARILY USED FOR AGRICULTURAL PURPOSES AT OR ABOUT RELEVANT TIME? NO, THE SAID PARCEL OF LAND HAS NOT BE USED FOR THE AGRICULTURAL PURPOSE AS MADE OUT IN THE ASSESSMENT ORDER 3 WHETHER SUCH USER OF THE LAND WAS FOR A LONG PERIOD OR WHETHER IT WAS OF A TEMPORARY CHARACTER OR BY WAY OF A STOP-GAP ARRANGEMENT? IT WAS FOR A SHORT PERIOD OF 27 MONTHS AFTER WHICH THE SAME PIECE OF LAND WAS SOLD. 4 WHETHER THE INCOME DERIVED FROM THE AGRICULTURAL OPERATIONS CARRIED ON IN THE LAND BORE ANY RATIONAL PROPORTION TO THE INVESTMENT MADE IN PURCHASING THE LAND? NO. THE AGRICULTURAL INCOME IS SHOWN FROM THE AGRICULTURAL OPERATIONS IS NOT IN CONSONANCE WITH THE SIZE OF THE HOLDINGS. 5 WHETHER THE PERMISSION UNDER S. 65 OF THE BOMBAY LAND REVENUE CODE WAS OBTAINED FOR THE NON- AGRICULTURAL USE OF THE LAND? IF SO, WHEN AND BY WHOM (THE VENDOR OR THE VENDEE)? WHETHER SUCH PERMISSION WAS IN RESPECT OF THE WHOLE OR A PORTION OF THE LAND? IF THE PERMISSION WAS IN RESPECT OF A PORTION OF THE LAND AND IF IT WAS OBTAINED IN THE PAST, WHAT WAS THE NATURE OF THE USER OF THE SAID PORTION OF LAND ON MATERIAL DATE? THE LA ND HAS BEEN SOLD TO THE VENDEE WITH CLEAR INTENTION OF USE FOR THE NON AGRICULTURAL I.E. HOUSING PURPOSE ONLY. THE PERMISSION HAS BEEN OBTAINED FOR NA USE OF THE LAND BY THE VENDEE AND THE LAND HAS BEEN DIVIDED IMMEDIATELY INTO PLOTS AND SOLD OFF . HENCE IT CLEARLY SHOWS THAT THE DOMINANT INTENTION OF THE ASSESSEE WAS TO MAKE PROFIT FROM SUCH SALE. THE PERMISSION HAS BEEN OBTAINED FOR WHOLE OF THE LAND PARCEL. 6 WHETHER THE LAND, ON THE RELEVANT DATE, HAD CEASED TO BE PUT TO AGRICULTURAL USE? IF SO, WHETHER IT WAS PUT TO AN ALTERNATIVE USE? WHETHER SUCH CESSER AND/OR ALTERNATIVE USER WAS OF A PERMANENT OR TEMPORARY NATURE? THE LAND HAS NOT BEEN PUT TO AGRICULTURAL USE AS MADE OUT IN THE ASSESSMENT ORDER AND THE STATEMENTS OF THE TALATI AND THE PURCHASER. IT CAN BE SEEN THAT THERE WAS ONLY A GRASS PAD ON THE LAND AT THE TIME OF THE SALE/PURCHASE. THE AGRICULTURAL PRODUCE MENTIONED IN THE 7/12 EXTRACT WAS MOONG AND NILGIRI TREES. IT MAY BE NOTED THAT THE NILGIRI TREES TAKE ATLEAST 6 YEARS TO GROW . IT IS DIFFICULT TO UNDERSTAND HOW THE STUMPS OF THE NILGIRI TREES WERE NOT PRESENT AT SITE. MRS.SUNAND A U.CHAUDHARY 7 WHETHER THE LAND, THOUGH ENTERED IN REVENUE RECORDS, HAD NEVER BEEN ACTUALLY USED FOR AGRICULTURE, THAT IS, IT HAD NEVER BEEN PLOUGHED OR TILLED? WHETHER THE OWNER MEANT OR INTENDED TO USE IT FOR AGRICULTURAL PURPOSES? NEVER USED FOR AGRICULTURAL PURPOSES. NOT TILLED OR PLOUGHED. IT WAS NEVER MEANT FOR AGRICULTURAL OPERATIONS AS IT CAN BE SEEN FROM THE SHORT TIME OF OWNERSHIP. 8 WHETHER THE LAND WAS SITUATE IN A DEVELOPED AREA? WHETHER ITS PHYSICAL CHARACTERISTICS, SURROUNDING SITUATION AND USE OF THE LANDS IN THE ADJOINING AREA WERE SUCH AS WOULD INDICATE THAT THE LAND WAS AGRICULTURAL? THE MOST IMPORTANT PART IS THAT THE LAND PARCEL OWNED BY THE ASSESSEE IS JUST A 1 KM AWAY FROM THE RESIDENTIAL ZONE . THE ZONING SYSTEM WILL MAKE SURE THAT THE USE OF THE LAND IS REGULATED IN AND AROUND THAT AREA. THE SHORT DISTANCE FROM THE RESIDENTIAL ZONE MAKES IT CLEAR THAT THE LAND WOULD BY NOW IN THE TP SCHEME OF THAT AREA OF JALGAON. 9 WHETHER THE LAND ITSELF WAS DEVELOPED BY PLOTTING AND PROVIDING ROADS AND OTHER FACILITIES? YES, THE LAND HAS BEEN MADE INTO NA AND THE IMMEDIATE OWNER ON TRANSFER HAS MADE IT INTO HOUSING COLONY AND PLOTS HAVE BEEN SOLD OFF... 10 WHETHER THERE WERE ANY PREVIOUS SALES OF PORTIONS OF THE LAND FOR NON-AGRICULTURAL USE? NA 11 WHETHER PERMISSION UNDER S. 63 OF THE BOMBAY TENANCY & AGRICULTURAL LANDS ACT, 1948, WAS OBTAINED BECAUSE THE SALE OR INTENDED SALE WAS IN FAVOUR OF A NON- AGRICULTURIST WAS FOR NON-AGRICULTURAL OR AGRICULTURAL USER? NA OBTAINED FOR THE NON AGRICULTURAL USE BY THE VENDEE IMMEDIATELY ON TRANSFER OF THE LAND PARCEL. 12 WHETHER THE LAND WAS SOLD ON YARDAGE OR ON ACREAGE BASIS? LAND SOLD ON THE YARDAGE BASIS BY THE PURCHASER 13 WHETHER AN AGRICULTURIST WOULD PURCHASE THE LAND FOR AGRICULTURAL PURPOSES AT THE PRICE AT WHICH THE LAND WAS SOLD AND WHETHER THE OWNER WOULD HAVE EVER SOLD THE LAND VALUING IT AS A PROPERTY YIELDING AGRICULTURAL PRODUCE ON THE BASIS OF ITS YIELD? IN NO WAY LAND WOULD BE PURCHASED AT THE SITE SOLD FOR THE PRICE AT WHICH IT WAS SOLD. THE LAND PARCEL NOW LIES WITHIN THE HIGHLY LUCRATIVE RESIDENTIAL AREAS OF THE JALGAON CITY AND AGRICULTURAL OPERATIONS ARE NOT POSSIBLE ON SUCH LANDS. 14. FROM THE TABLE WITH THE DATA COMPILED BY THE DR , WE FIND THAT THE DATA RELATING TO THE LAND IN QUESTION RELEVANT FOR THE P ERIOD DURING THE HOLDING PERIOD BY THE ASSESSEE AND ALSO THE POST TRANSFER P ERIOD WAS TAKEN INTO CONSIDERATION. ITEMS NO 5,9,11,12 ETC OF THE ABOVE TABLE CONTAINS THE DATA OF THE VENDEE AND HOWEVER, THIS DATA CANNOT BE FULLY I GNORED AS SUCH DATA OFTEN EMANATE FROM THE DISCUSSIONS OCCUR DURING THE TRANS FER EVENT OF THE PROPERTY. LIKE THE ITEM NO 1 OF THE TABLE, THERE IS NEED FOR AMENDING THE DATA OF OTHER ITEMS OF THE TABLE SUPPLIED BY THE LD DR. SUBJECTED TO THESE CORRECTIONS, IF ANY, WE FIND THAT THE TEST LIED DOWN BY THE HONBLE APEX COURT WOULD HELP TO DECIDE THE PRESENT DISPUTE. THEREFORE, WE PROCEED T O ANALYSE THE ABOVE TABLE IN THE LIGHT OF THE FACTS AVAILABLE ON RECORD BEFOR E US. MRS.SUNAND A U.CHAUDHARY 15. WE FIND THAT THE LAND TRANSFERRED IN QUESTION I S BORNE IN THE RECORDS OF THE REVENUE AS AGRICULTURAL IN NATURE. REGARDING TH E USE OF THE LAND FOR AGRICULTURAL PURPOSE, WE FIND THERE IS LOT OF DISPU TE. IN THIS REGARD, THE ASSESSEE CLAIMS THAT HE GREW MOONG AND NILIGIRI. WH EREAS THE VENDEE OF THE LAND GIVES A STATEMENT THAT HE PURCHASED THE FREE O F ANY SUCH CROPS OR STUMPS OF THE CROPS/TREES. TALATIS STATEMENT DOES NOT HELP THE ASSESSEE TOO. FURTHER, ASSESSEE FAILS TO MEET THE DRS ARGUMENT T HAT HOW THE NILIGIRI STUMPS ARE NOT SEEN BY THE VENDEE, WHEN HE PURCHASED THE L AND. ASSESSEE FAILED TO PROVIDE ANY DIRECT EVIDENCE SAY PURCHASE/LABOUR BIL LS IN SUPPORT OF THE PURCHASE OF SEED/SEEDLINGS, FERTILIZERS, PESTICIDES , LABOUR BILLS ETC ON ONE SIDE OR SALE BILLS IN SUPPORT OF THE EARNING OF THE NET AGRICULTURAL INCOME OF RS 15,000/- ON THE OTHER. IT IS A SETTLED LEGAL PROPOS ITION THAT, WHEN THE CLAIM OF EXEMPTION/DEDUCTION IS MADE, THE ONUS IS ON THE ASS ESSEE TO DEMONSTRATE THE GENUINENESS OF SUCH CLAIM. CONSIDERING THE ASSESSEE S FAILURE IN THIS REGARD, WE ARE OF THE OPINION, THE ARGUMENTS/VIEWS OF THE R EVENUE GIVEN IN ITEMS 2, 4, 6, 7 OF THE TABLE MUST BE UPHELD ON THIS ISSUE O F USE OF THE LAND FOR AGRICULTURAL PURPOSE. THE REMARKS OF LD DR IN ITEM 3 OF THE TABLE IS FACTUAL IN NATURE AND THE HOLDING PERIOD OF THE IMPUGNED LAND IN THE HANDS OF THE ASSESSEE IS ONLY 27 MONTHS AND ODD AND THEREFORE, T HIS PERIOD FALLS SHORT OF THE HOLDING PERIOD SPECIFIED FOR LONG TERM CAPITAL ASSET SUCH AS LAND AND BUILDING AS DEFINED VIDE SECTION 2(47A) OF OF THE A CT. THEREFORE, THE LAND CANNOT BE EVEN MEET THE DEFINITION OF A LONG TERM CAPITAL ASSET. REGARDING THE CONTENTS GIVEN IN ITEM 8 OF THE TABLE, THE CASE OF THE REVENUE IS THAT THE LAND PARCEL OWNED BY THE ASSESSEE IS JUST A 1 KM AW AY FROM THE RESIDENTIAL ZONE. THE ZONING SYSTEM WILL MAKE SURE THAT THE USE OF THE LAND IS REGULATED IN AND AROUND THAT AREA. THE SHORT DISTANCE FROM TH E RESIDENTIAL ZONE MAKES IT CLEAR THAT PRACTICALLY, THE AGRICULTURAL PRACTICES CANNOT BE UNDERTAKEN AND IN ANY CASE THE LAND WOULD BE NOW IN THE TOWN PLANNING (TP) SCHEME OF THAT AREA OF JALGAON. IN OUR OPINION, LOCATION OF THE LA ND PROXIMITY TO THE RESIDENTIAL ZONE GOES AGAINST THE ASSESSEE. MORE SO WHEN THERE IS NO DIRECT EVIDENCE AND CONVINCING EVIDENCE TO DEMONSTRATE THE EXISTENCE OF AGRICULTURAL ACTIVITY ON THE SAID LAND DURING THE HOLDING PERIOD . REGARDING THE CONVERSION OF THE LAND, PLOTTING, CONSTRUCTION OF ROADS AND SA LE OF THE PLOTS IN YARDAGE AND NOT ACREAGE, IT IS A FACT THAT SHE DID NOT DO A NY OF THESE ACTIVITIES, HOWEVER, THE VENDEE HAS DONE ALL THESE ACTIVITIES. NOW THE QUESTION THAT ARISES HERE RELATES TO IF THE DATA RELEVANT FOR THE VENDEE CAN BE USED BY THE REVENUE TO ADVANCE THEIR CASE? IN OUR OPINION, IT I S VERY DIFFICULT TO ANSWER THIS BROAD QUESTION WITH MEAGER FACTS ON FILE. HOWEVER, THE FACT THAT THE ASSESSEE SOLD THE PROPERTY OF RS 1.43 LAKHS WORTH FOR THE SU M OF RS 11.11 LAKHS IN THE GAP OF 27 MONTHS OF HOLDING PERIOD IS OF SOME SIG NIFICANCE. IN OTHER WORDS, MRS.SUNAND A U.CHAUDHARY THE SAID FIGURES INDICATE THAT THE SAID LAND IS WOR THY FOR EARNING COMMERCIAL PROFITS AND THE ASSESSEE IS AWARE OF SUCH VALUE ADD ITION OWING TO THE PROXIMITY OF THE LAND TO THE RESIDENTIAL ZONE. THER EFORE TESTS HAVE TO BE ACCORDINGLY MODIFIED TO SUIT THE PRESENT CASE AND T HEREFORE, THE WE HAVE TO DISMISS THE ARGUMENTS OF THE COUNSEL ON THESE ISSUE S. FINALLY, REGARDING THE CONTENTS IN ITEM 13 OF THE TABLE RELATING TO, - WHETHER AN AGRICULTURIST WOULD PURCHASE THE LAND F OR AGRICULTURAL PURPOSES AT THE PRICE AT WHICH THE LAND WAS SOLD AN D WHETHER THE OWNER WOULD HAVE EVER SOLD THE LAND VALUING IT AS A PROPERTY YIELDING AGRICULTURAL PRODUCE ON THE BASIS OF ITS YIELD?.. ,- WE HAVE OUR RESERVATION ON THIS ISSUE AND IN OUR OP INION, THE SAID LAND CANNOT BE PURCHASED BY AN AGRICULTURIST AND THERE IT IS A GAINST THE ASSESSEE. THE REASON FOR THIS OPINION INCLUDE (I) THE LAND IS WOR TH RS 11.11 LAKHS; (II) THE AGRICULTURAL PRODUCE IS WORTH FEW THOUSANDS IE 15,0 00/- AS CLAIMED IN THE RETURN; (III) THE LAND IS NOT FIT FOR AGRICULTURE A S VIEW OF THE DIFFICULTIES AND UNSUITABILITY OUT LINED BY THE ASSESSEE IN HIS REPL Y REPRODUCED IN PARAGRAPH 9(G) ABOVE. G). THE SAID LAND WAS SOLD NOT WITH INTENTION T O MAKE PROFIT BUT IT HAD BECOME INCONVENIENT AND DIFFICULT TO CARRY OUT THE AGRICULTURE ACTIVITIES IN THE SAID AREA DUE TO UNCONGENIAL CIRCUMSTANCES PREVAILING IN THAT AREA. 16. THE ABOVE STATEMENT OF THE ASSESSEE, ALTHOUGH M ADE IN THE CONTEXT OF INFORMING THE ASSESSEES INTENTION BEHIND THE SALE OF THE IMPUGNED LAND, INFORMS THE PREVAILING CONDITIONS ATTACHED TO THE I MPUGNED LAND AND IT IS NOT SUITABLE FOR AGRICULTURAL ACTIVITIES AND THEREFORE, NO REAL AGRICULTURIST WILL GO FOR SUCH LAND, WHICH IS UNSUITABLE FOR AGRICULTURE PRAC TICES. WHY WILL ANY AGRICULTURIST GO FOR THIS PIECE OF LAND KNOWING VER Y WELL THAT IT IS NOT FIT FOR AGRICULTURAL ACTIVITIES IN VIEW OF THE UNTOLD UNCON GENIAL CIRCUMSTANCES? THEREFORE, WE HAVE NO HESITATION IN DISMISSING THE ASSESSEES VIEWS ON THIS POINT AND UPHOLD THE ARGUMENTS OF THE REVENUE. 17. WE HAVE ALSO CONSIDERED THE CITATIONS RELIED UP ON BY THE ASSESSEES COUNSEL. ON SUCH CITATION RELATES THE JUDGMENT OF T HE HONBLE HIGH COURT OF BOMBAY AT GOA IN THE CASES OF CIT VS SMT DEBBIE ALE MAO TAX APPEAL NO 1 OF 2006 AND ALSO CIT VS SMT JOAQUIM ALEMAO TAX APPEAL NO 2 OF 2006 REPORTED IN 196 TAXMANN 230 (BOM). IN THIS JUDGMENT, HONBLE HIGH COURT HELD THAT THE LAND BORNE IN REVENUE RECORDS (I) WITH STANDING COC ONUT TREES; (II) BUT WITHOUT ANY OTHER AGRICULTURAL ACTIVITIES; (III) WHEN SOLD 2 YEARS AFTER ITS PURCHASE; (IV) FOR CONSIDERATION 10 TIMES MORE THAN THE PURCHASE P RICE; (V) TO A PURCHASER FOR RAISING A BEACH RESORT A COMMERCIAL ACTIVITIES, IS AN AGRICULTURAL LAND. IN MRS.SUNAND A U.CHAUDHARY THIS REGARD, WE HAVE CONSIDERED THE ARGUMENTS OF TH E DR WHO STATED THAT THE SAID DECISION HAS NOT CONSIDERED THE THEN EXISTING JUDGMENT OF THE SUPREME COURT IN THE CASE OF THE SMT.SAARIFABIBI MOHAMED IBRAHIM AND OTHERS (SUPRA), WHICH IS KNOWN FOR ITS RATIO THAT FOR ASCERTAINING WHETHER LAND IS AGRICULTURAL, CUMULATIVE EFFECT OF ALL RELEVANT FACTS FOR AND AGA INST ASSESSEE MUST BE CONSIDERED; ON SUCH CONSIDERATION LAND HELD NOT TO BE AGRICULTURAL WHEN SOLD. THE FACT THE ABOVE JUDGMENT OF THE APEX COURT WAS N OT CONSIDERED IN THE SAID CASES REPORTED IN REPORTED IN 196 TAXMANN 230 (BOM) (SUSPRA) WAS ALSO BROUGHT TO OUR NOTICE. FURTHER BOTH THE PARTIES HA VE VEHEMENTLY QUOTED VARIOUS OTHER CITATIONS, WHICH WERE DULY CONSIDERED BY US. WE HAVE PERUSED THE SAID JUDGMENT OF THE APEX COURT AND FOUND THE S AME WAS HELD IN FAVOUR OF THE REVENUE. IN THE SAID JUDGMENT, HONBLE APEX COU RT DISMISSED THE ASSESSEES FACTS THAT THE LAND IS BORNE ON THE REVENUE RECORDS AND ASSESSEE PAID THE LAND REVENUE. REVENUES FAILURE TO PROVE T HAT THE SAID LANDS WERE USED FOR NON AGRICULTURAL PURPOSE WAS ALSO DISMISSE D. ON THE OTHER HAND , VARIOUS OTHER EVENTS IE POTENTIAL OF THE PROPERTY FOR NON AGRICULTURAL USE IE HOUSING PURPOSE AND THE INTENTION AND CONDUCT OF THE ASSESSEE TO EXPLOIT SUCH POTENTIAL, WERE CONSIDERED BY THE APEX COURT W HILE DESIGNATING THE SAME AS AN NON AGRICULTURAL LAND AND DECIDED THE CASE IN FAVOUR OF THE REVENUE. ON PERUSAL OF THE SAID JUDGMENT, IN OUR OPINION, POTEN TIAL OF THE PROPERTY IE LOCATION BASED OR OTHERWISE, INTENTION AND CONDUCT OF THE LAND OWNER IN DEALING WITH SUCH POTENTIAL FILLED PROPERTY, END US E OF THE SAID PROPERTY ARE VITAL FACTS TO BE CONSIDERED FOR ADJUDICATING THE I SSUE UNDER CONSIDERATION. THE FOLLOWING EXTRACTS FROM THE HELD PORTION OF THE SAID JUDGMENT IE SMT.SAARIFABIBI MOHAMED IBRAHIM AND OTHERS (SUPRA) ARE CLOSELY RELEVANT AND THE SAME ARE EXTRACTED AS UNDER: THE LAND WAS SITUATED WITHIN THE MUNICIPAL LIMITS ONE KM FROM THE SURAT RAILWAY STATION; THE LAND WAS NOT BEING C ULTIVATED (FOUR YEARS) UNTIL IT WAS SOLD..; THE APPELLANT HAD ENTER ED INTO AN AGREEMENT OF SALE WITH A HOUSING COOPERATIVE SOCIETY TO SELL THE SAID LAND FOR AN AVOWED NON AGRICULTURAL PURPOSE;, NAMELY, CONSTRUCT ION OF HOUSE; THEY HAD APPLIED FOR MARCH 1969 (SOLD IN MAY 1969) FOR PERMISSION TO SELL THE LAND FOR NON AGRICULTURAL PURPOSES AND OBTAINE D PERMISSION IN APRIL 69; LAND WAS SOLD IN SQ YARDS AND THE PURCHAS ER SOCIETY COMMENCED CONSTRUCTION COOPERATION WITHIN THREE DAY S OF PURCHASE. THE ENTERING INTO AN AGREEMENT TO SELL THE LAND FO R HOUSING PURPOSES, THE APPLYING AND OBTAINING THE PERMISSION TO SELL THE LAND FOR NON AGRICULTURAL PURPOSES UNDER S 63 OF THE BOMBAY TENANCY AND AGRICULTURAL LANDS ACT AND ITS SALE SOON THEREAFTER AND THE FACT THAT THE LAND WAS NOT CULTIVATED FOR A PERIOD OF FOUR YEARS PRIOR TO ITS SALE COUPLED WITH ITS LOCATION, THE PRICE AT WHICH IT WA S SOLD DO OUTWEIGH THE CIRCUMSTANCES APPEARING IN FAVOUR OF THE APPELLANT S CASE. THE AFORESAID FACTS DO ESTABLISHES THAT THE LAND WAS NO T AN AGRICULTURAL LAND WHEN IT WAS SOLD. MRS.SUNAND A U.CHAUDHARY 18. FURTHER, WE HAVE ALSO PERUSED THE RELEVANT PARA GRAPHS OF THE CIT(A)S ORDER. FOR THE SAKE OF COMPLETENESS, WE REPRODUCE PARAGRAPHS 4.9, 4.10, 5 AND 5.1 OF HIS ORDER, WHICH ARE AS UNDER. 4.9 THE ASSESSEE HEAVILY RELIED ON THE 7/12 EX TRACT, WHEREAS THE A.O. CLEARLY PROVED THAT THE 7/12 EXTRACT CANNOT BE TAKEN AS AN ACCEPTABLE EVIDENCE IN THE PRESENT FACTS OF THE CAS E IN VIEW OF THE ENQUIRY MADE HIM U/S 131 OF THE ACT. FURTHER ENQUI RIES MADE BY THE A.O. FROM THE PURCHASER PROVED THAT THERE WERE NO C ROPS STANDING AT THE TIME OF SALE OF THE SAID PIECE OF LAND. THE AS SESSEE STRONGLY OBJECTED TO THE USE OF THE SAID STATEMENTS IN THE A SSESSMENT WITHOUT GIVING HER AN OPPORTUNITY. HOWEVER, DURING THE COU RSE OF THE APPEAL PROCEEDINGS, THE A.O. OFFERED THE OPPORTUNITY OF CROSS- EXAMINATION TO THE ASSESSEE, BUT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE DID NOT AVAIL THE OPPORTUNITY FOR WHATEVER REASONS HE FELT. THIS FACT HAS BEEN CONFIRMED BY THE ASSESSEE HERSEL F IN HER SUBMISSIONS DT.18-8-2008. THEREFORE, THE ASSESSEE CANNOT TAKE A PLEA THAT THE SAID STATEMENTS WERE USED AGAINST HER WITH OUT GIVING HER THE OPPORTUNITY OF CROSS-EXAMINATION. THE ASSESSEE WAS NOT HAVING ANY EVIDENCE REGARDING THE PURCHASE OF SEEDS, FERTILIZER OR PES TICIDES OR ANY OTHER EXPENDITURE ABOUT THE AGRICULTURAL OPE RATIONS CARRIED OUT BY HER. THE ASSESSEE EVEN COULD NOT PRODUCE ANY FOR M OF EVIDENCE REGARDING THE ALE OF AGRICULTURAL PRODUCE BY HER OU T OF THE SAID LAND. THE ASSESSEE AGAIN AND AGAIN RELIED ON THE 7/12 EXT RACT STATING THAT IT WAS A VALID DOCUMENT AND IT SHOULD BE ACCEPTED. WHE N THE A.O. WAS ABLE TO PROVE THAT THE CONTENTS OF THE 7/12 EXTRACT S AND DID NOT DISPROVE HE SAME. IT S THE BURDEN OF THE ASSESSEE T O PROVE WITH ANY OTHER CORROBORATIVE EVIDENCE ABOUT THE GENUINENESS OF THE CONTENTS OF THE 7/12 EXTRACTS. GENERALLY THE 7/12 EXTRACTS IS AN ACCEPTED EVIDENCE REGARDING THE AGRICULTURAL OPERATIONS. BUT IN THE PRESENT CASE, THE A.O. MADE ENQUIRIES AND FOUND THAT THE ENTRIES WERE NOT BASED ON ACTUAL CIRCUMSTANCES. THEREFORE, THE 7/12 EXTRACTS CANNOT BE ACCEPTED AS EVIDENCE IN THIS PARTICULAR CASE IN THE ABSENCE OF ANY OTHE R EVIDENCE TO PROVE THE CONTENTION THAT THERE WAS ACT UAL CULTIVATION. 4.10 WHETHER A PARTICULAR PIECE OF LAND IS AN AGRI CULTURAL LAND AND CULTIVATED OR OTHERWISE IS A QUESTION OF FACT. NO HELP OF ANY JUDICIAL DECISION IS REQUIRED TO PROVE THIS BECAUSE EACH CAS E IS DIFFERENT WITH PECULIAR FACTS. THEREFORE, I AM UNABLE TO TAKE HEL P OF ANY DECISION RELIED ON EITHER BY THE ASSESSEE OR BY THE A.O. THE ASSESSEE ALSO TRIED TO ARGUE THAT THE LAND WAS CLASSIFIED AS AN AGRICUL TURAL LAND AND THE LAND REVENUE WAS PAID BY HER. THE QUESTION TO BE C ONSIDERED HERE IS WHETHER THE AGRICULTURAL OPERATIONS WERE ACTUALLY C ARRIED OUT ON THE SAID PIECE OF LAND. THE PAYMENT OF LAND REVENUE CA NNOT BE TAKEN TO PROVE THAT THERE WAS AN AGRICULTURAL OPERATION BECA USE THE LAND REVENUE IS COLLECTED WHEN IT IS PAID EVEN WITHOUT A CTUAL CULTIVATION. THEREFORE, THE A.O.IS RIGHT IN COMING TO THE CONCLU SION THAT THERE WAS NO AGRICULTURAL ACTIVITY ON THE SAID PIEC E OF LAND. THUS, TAKING OVERALL FACTS OF THE CASE I AM OF THE CONSIDERED OPINION THAT THERE WERE NO AGRICULTURAL OPERATIONS ON THE SAID PIECE OF LAND TO BE AN AGRICULTURAL LAND. THEREFOR E, THE SURPLUS ON SALE OF SUCH LAND IS TAXABLE UNDER THE PROVISION S OF THE ACT AND THE ISSUE OF ITS TAXABILITY IS DISCUSSED IN THE FOLLOWING PARAGRAPHS. IN VIEW OF THE ABOVE DISCUSSION, THE AMOUNT OF RS.15,000/- ADDED BY THE A. O. AS INCOME FROM OTHER SOURCES IS ALSO CONFIRMED . 5. THE NEXT ISSUE TO BE DECIDED IS THAT WHETHER TH E PROFIT ON THE SALE OF SAID LAND IS TAXABLE AS BUSINESS INCOME ON ACCOU NT OF ADVENTURE IN THE NATURE OF TRADE OR CAPITAL GAINS. HERE AGAIN, NO PARTICULAR CASE LAW CAN BE DIRECTLY APPLIED TO THE PRESENT FACTS OF THE CASE. THERE ARE MRS.SUNAND A U.CHAUDHARY VARIOUS DECISIONS ON THIS ISSUE AND EACH CASE IS DI FFERENT BECAUSE OF DISTINGUISHABLE FACTS. HOWEVER, THE PRINCIPLES LAI D DOWN IN THE VARIOUS DECISIONS WILL ACT AS A GUIDING FACTOR TO DECIDE WH ETHER A PARTICULAR TRANSACTIONS IS AN ADVENTURE IN THE NATURE OF TRADE OR OTHERWISE. IN THE PRESENT CASE, THE A.O. HELD THAT THE TRANSACTION OF SALE OF LAND AMOUNTED TO ADVENTURE IN THE TRADE OF TRADE FOR THE FOLLOWING REASONS. I. THE ASSESSEE WAS NOT AN AGRICULTURIST. II. THE ASSESSEE NEVER CULTIVATED SAID PIECE OF LAND. III. THE SAID PIECE OF LAND WAS VERY CLOSE TO THE MUNICI PAL LIMIT OF BHUSAWAL. IV. THE SALE OF THE SAID PIECE OF LAND WAS AT A SUBSTAN TIALLY HIGH PRICE. V. IMMEDIATELY AFTER THE SALE, THE PURCHASER DEVELOPED THE LAND FOR COMMERCIAL PURPOSES. 5.1 AS PER THE DETAILED SUBMISSIONS OF THE ASS ESSEE, IT MAY BE SEEN THAT THOUGH THE ASSESSEE WAS NOT AN AGRICULTURIST E ARLIER, BUT DEFINITELY SHE HAILS FROM AN AGRICULTURIST FAMILY. THIS FACTO R IS ALSO NOT VERY RELEVANT TO DECIDE WHETHER A TRANSACTION IS IN THE ADVENTURE OF TRADE OR OTHERWISE. THE ASSESSEE IS NOT DOING ANY BUSINESS AND SHE BEING A LADY IT CANNOT BE TAKEN THAT SHE DID THE ALE TRANSA CTION WITH THE INTENTION OF PROFIT ON SALE UNLESS THERE IS STRONG EVIDENCE. AN ASSET CAN BE ACQUIRED EITHER FOR HOLDING IT AS AN INVESTMENT OR FOR PROFIT. IN THE INSTANT CASE, THE SAID PIECE OF LAND WAS HELD AS AN INVESTMENT. A PERSON WHO IS INVESTING DEFINITELY SEES PROPER APPR ECIATION. THIS IS WHAT HAPPENED IN THIS CASE AND THE ASSESSEE SOLD TH E LAND IN VIEW OF THE GOOD PRICE DUE TO BOOM IN THE REAL ESTATE SECTO R. THE PROXIMITY OF THE SAID PIECE OF LAND TO THE MUNICIPAL LIMITS OF B HUSAWAL CAN BE ONE OF THE CONSIDERATIONS BY THE ASSESSEE FOR MAKING THE S AID INVESTMENT AND SUCH CONSIDERATION CANNOT BE EQUATED WITH AN INTENT ION O RESALE FOR PROFIT. THE ASSESSEE ALSO HELD THE SAID PIECE OF L AND FOR A CONSIDERABLE PERIOD, I.E. 27 MONTHS AND THIS IS SUFFICIENT ENOUG H TO HOLD AS AN INVESTMENT. THE CONVERSION OF THE LAND FOR COMMERC IAL PURPOSE BY THE PURCHASER WAS NOT WITHIN THE CONTROL OF THE ASSESSE E HENCE NO ADVERSE INFERENCE CAN BE DRAWN. THE ASSESSEE IS NOT IN THE BUSINESS OF REAL ESTATE AND HAS NOT CONVERTED THE LAND FOR COMMERCIA L USE. THUS, THE FACTORS CONSIDERED BY THE A.O. FOR HOLDING THE SAID SALE TRANSACTION AS AN ADVENTURE IN THE NATURE OF TRADE ARE NOT JUSTIFI ABLE. CONSIDERING THE OVERALL FACTS OF THE CASE , I AM OF THE OPINION THAT THE ASSESSEE PURCHASED THE LAND AS AN INVESTMENT AND HELD IT FOR A CONSIDERABLE PERIOD AND THEN SOLD THE SAME. THEREFORE, THIS TRANSACTION WOULD RESULT INTO CAPITAL GAINS. THEREFORE, THE A.O S DIRECTED TO CONSIDER THE SURPLUS ON THE SALE TRANSACTION BE TREATED AS C APITAL GAINS AND RE- COMPUTE THE TAX ACCORDINGLY. 19. THE GIST OF THE ABOVE DISCUSSION IE DIVERGENT S TANDS OF THE PARTIES IN DISPUTE ONE SIDE, ANALYSIS GIVEN IN THE IMPUGNED OR DER OF THE CIT(A) AND THE AVAILABLE LEGAL PROPOSITIONS ON THE DISPUTE ON THE OTHER. CONSIDERING THE BINDING NATURE OF THE JUDGMENT OF THE APEX COURT, W E FIND THE SAME HAS TO BE FOLLOWED. ON THE APPLICABILITY OF THE SAID JUDGMENT TO THE FACTS OF THE CASE, IN OUR OPINION, THE FACTS OF BOTH THE CASES ENJOY BROA D SIMILARITY. IN THE INSTANT CASE, IN OUR OPINION, THE IMPUGNED LAND SHOULD BE H ELD NOT USED FOR THE AGRICULTURAL PURPOSES AS THE ASSESSEE FAILED SHOW U P ANY EVIDENCE FORGET ABOUT ANY DIRECT EVIDENCE. IN FACT THERE IS CONTRAR Y EVIDENCE TO SUGGEST THAT THE SAID LAND WAS NOT USED FOR AGRICULTURAL PURPOSE IN THE FORM OF A STATEMENT MRS.SUNAND A U.CHAUDHARY OF THE VENDEE OF THE LAND. IT IS RELEVANT TO MENTIO N THAT THE ASSESSEE DID NOT MADE USE OF THE OFFER OF THE CIT(A) DURING THE FIRS T APPELLATE PROCEEDINGS FOR CROSS EXAMINATION OF THE WITNESS. REGARDING POTENT IAL OF THE IMPUGNED LAND, IT IS UNDISPUTED FACT THAT THE SAID LAND IS LOCATED PROXIMITY TO THE RESIDENTIAL ZONE AS DISCUSSED IN THE TABLE ABOVE. IT IS A FACT THAT THE END USE OF THE LAND IS FOR RESIDENTIAL PLOTS ONLY. REGARDING THE TIMING OF THE CONVERSION OF THE LAND IN TO NA, THE DRS ARGUMENT THAT THE ASSESSEE BEING A WOMEN SHIFTED THAT RESPONSIBILITY TO THE VENDEE, WHO SOON AFTER THE SA LE, APPLIED FOR NA ON 28/7/2003, OBTAINED THE SAME ON 30/9/2003 AND FINAL LY PLOTTED THE LAND AND SOLD THEM OFF THEREAFTER THE SALE. MR PRAVIN BALAKR ISHNA CHAUDARI, THE VENDEE, TOOK POSSESSION OF THE LAND ON 21/02/2003. AANSWERS TO QUESTIONS 9 TO 16 OF THE STATEMENT OF MR PRAVIN B CHAUDARI PLACED AT PAG E 72&73 ARE RELEVANT AND PERUSED. CONSIDERING THE SERIES OF THE EVENTS REGIS TERED SOON AFTER THE DATE OF SALE TRANSACTION OF THE LAND, IN OUR OPINION, THE A SSESSEES INTENTION OF COMMERCE WITH THE IMPUGNED LAND CANNOT BE DISASSOCI ATED WITH SAID SALE TRANSACTION. CONSIDERING THE END USE OF THE LAND DO NE SOON AFTER THE SALE TRANSACTION, THE ASSESSEE CANNOT BE HELD FREE FROM THE COMMERCIAL EXPLOITATION OF THE IMPUGNED LAND. IN OUR OPINION, NON AGRICULTURAL USE OF LAND IS PART AND PARCEL OF THE IMPUGNED SALE TRANSACTION AND THEREFORE, IN OUR OPINION, THE ASSESSEE IS BENEFICIARY OF THE SUCH NO N AGRICULTURAL PROFITS. IT IS AN UNDISPUTED FACT THAT THE LAND PURCHASED FOR RS 1.43 LAKHS WAS SOLD FOR RS 11.11 LAKHS IN A SPAN OF 27 MONTHS. NORMALLY, SUCH PHENOMENAL PROFITS ARE POSSIBLE WITH NON AGRICULTURAL LAND DEALS AND IT IS ONE OF THE FACTORS WHICH GOES AGAINST THE ASSESSEE WITHIN THE MEANING OF CIT ED THE SUPREME COURTS JUDGMENT. FURTHER, APEX COURT HAS DISMISSED THE ASS ESSEES ARGUMENTS THAT THE LAND RECORDS BEAR WITNESS IN HER FAVOUR AS OTHE R FACTORS WEIGH MORE AND IN FAVOUR OF THE REVENUE. THEREFORE, THE EVENTS THAT T OOK PLACE IN AND AROUND THE TIMING OF THE IMPUGNED SALE TRANSACTION ARE REL EVANT FOR DECIDING THE ISSUE UNDER CONSIDERATION. INTENTION OF THE ASSESSEE IS D ECIPHERABLE FROM SUCH EVENTS. POTENTIAL OF THE LAND FOR PLOTTING FOR HOUS ING PURPOSE AND PHENOMENAL PRICE OF RS11.11LAKHS EARNED BY THE ASSESSEE ALSO A RE THE RELEVANT INDICATORS. IN ANY CASE, THE LAND IS NOT CONGENIAL FOR AGRICULT URAL USE AS ADMITTED BY THE ASSESSEE. THUS, THE RATIO OF THE SAID APEX COURTS JUDGMENT IS APPLICABLE MUTATIS MUTANDIS TO THE PRESENT DISPUTE . 20. UNLIKE IN THE CASE OF SMT DEBBIE ALEMAO SUPRA, WHERE THERE IS STANDING COCONUT TREES ARE UNDISPUTEDLY EXISTING AT THE TIME OF THE SALE, IN THE INSTANT CASE, THERE ARE NO SUCH SYMPTOMATIC AGRICULTURAL IN DICATIONS EXISTING ON THE LAND AT THE TIME OF THE SALE TO DEMONSTRATE THE AGR ICULTURAL NATURE OF THE IMPUGNED LAND. AS SUCH IT IS AN ADMITTED FACT BY TH E ASSESSEE IN ONE OF THE MRS.SUNAND A U.CHAUDHARY CORRESPONDENCE TO THE AO, OF COURSE, IN THE CONTEXT OF ANSWER TO QUESTION OF THE AO AS TO WHY SHE SOLD THE SAID LAND, THE LAND I N QUESTION IS UNCONGENIAL AND INCONVENIENT FOR AGRICULTURAL ACTIVITY. FURTHER , THE SAID LAND IS FREE ANY SUCH STANDING TREES AND NOT EVEN THE CUT STUMPS/STE MS OF THE NILIGIRS. THEREFORE, THE SAID JUDGMENT OF THE HIGH COURT OF B OMBAY AT GOA IS DISTINGUISHABLE ON FACTS. 21. THEREFORE, CONSIDERING VARIOUS ASPECT OF THE IS SUE IE VARIOUS TESTS PRESCRIBED BY THE APEX COURT ON SIDE, THE FACTUAL M ATRIX OF THE CASE ON THE OTHER AND ALSO THE ASSESSEES FAILURE TO DISCHARGE THE ONUS SINCE CLAIMED EXEMPTION AS AGRICULTURAL INCOME, WE ARE OF THE OPI NION THE CONCLUSIONS DRAWN BY THE CIT(A) IN PARA 4.10 OF HIS ORDER DOES NOT CA LL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND 2 IS DISMISSED . II. VALIDITY OF THE REASSESSMENT PROCEEDINGS U/S 14 7 22. NEXT ISSUE AT GROUND 1 RELATES TO THE ISSUE OF VALIDITY OF THE REASSESSMENT PROCEEDINGS. IN THIS REGARD, LEARNED COUNSEL FOR T HE ASSESSEE MENTIONED THAT THIS IS A CASE, WHERE THE ASSESSEE FILED THE RETURN OF INCOME ON 20-9-2003. THE RETURN WAS PROCESSED U/S 143(1)(A) AND THE ASSESSING OFFICER ISSUED A NOTICE U/S 148 OF THE I.T.ACT, 1961 (THE ACT) ON 4- 12-2006 I.E. WITHIN FOUR YEAR FROM THE END OF THE YEAR IN WHICH THE RETURN WAS F ILED. THE ASSESSING OFFICER RECORDED THE REASONS FOR REOPENING THE ASSESSMENT. FURTHER , THE ASSESSING OFFICER MET THE OBJECTIONS RAISED BY THE ASSESSEE BY PASSING AN ORDER DT. 5-7-2007. THE ASSESSING OFFICER REJECTED THE OBJECTIONS WHICH WERE CONFIRMED BY THE CIT(A) DURING THE FIRST APPELLATE PROCEEDINGS AS PER THE DISCUSSION GIVEN VIDE PARAGRAPH 7 OF THE IMPUGNED O RDER. AGGRIEVED WITH THE FINDING OF THE CIT(A), THE ASSESSEE TOOK UP THIS GR OUND BEFORE US. 23. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSE SSEE TOOK US THROUGH (1) THE REASONS RECORDED BY THE ASSESSING OFFICER, (2) OBJECTIONS RAISED BY THE ASSESSEE AND (3) THE ORDER OF THE ASSESSING OFFICER DT. 5-7-2007. FURTHER, THE ASSESSEES COUNSEL TOOK US THROUGH PAGE 7 OF THE IM PUGNED ORDER, WHICH CONTAINS THE DECISION OF THE CIT(A) ON THE ISSUE OF VALIDITY OF THE RE- ASSESSMENT PROCEEDINGS. FURTHER, THE PAPER BOOKS C ONTAINING VARIOUS FACTS AND THE DECISIONS WERE BROUGHT TO OUR ATTENTION. I N THE PROCESS, HE RELIED HEAVILY ON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF P.S.JOSHI 189 TAXMAN PAGE 1, SUPREME COURTS DECISION IN THE CASE OF KELVINATOR OF INDIA 187 TAXMAN 312 (SC) APART FROM OTHERS. FURTHER, HE REFERRED TO THE PROVISIONS OF SEC.157 OF THE MAHARASHTRA LAND REVEN UE CODE 1966 AND SEC.114 OF THE INDIAN EVIDENCE ACT, 1872 TO ADVANCE HIS CASE. MRS.SUNAND A U.CHAUDHARY 24. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE ARGUED VEHEMENTLY STATING THAT THE RE-ASSESSMENT PROCEEDIN GS ARE LEGALLY VALID FOR MANY REASONS. THEY ARE: (I) THIS IS A CASE OF PROC ESSING THE RETURN U/S 143(1)(A) AND THERE NO OCCASION FOR FORMATION OF AN OPINION ON ANY ISSUE IN GENERAL OR ON THE ISSUE WHICH IS SUBJECT MATTER OF RE-ASSESSMENT. THEREFORE, IT IS NOT A CASE OF CHANGE OF OPINION. HE RELIED O N THE SUPREME COURTS JUDGMENT IN THE CASE OF RAJESH JHAVERI STOCK BROKER S PVT.LTD. 291 ITR 500 (SC); (II) FURTHER, REFERRING TO THE REASONS RECORD ED BY THE ASSESSING OFFICER, THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS OF THE OPINION THAT AT THE RELEVANT POINT OF TIME, THE ASSESSING OFFICER, WHO IS IN LOCAL KNOW OF THE GEOGRAPHY OF THE AREA AND THE REAL ESTATE DEVELOPME NTS IN S.NO. UNDER CONSIDERATION HAS FORMED AN OPINION BASED ON THE IN FORMATION AVAILABLE BEFORE HIM IN THE FORM OF RETURN OF INCOME AND THE ANNEXUR E APPENDED THERETO, HAS COME TO THE CONCLUSION THAT THE SALE TRANSACTION IN QUESTION IS AN ADVENTURE IN THE NATURE OF TRADE. THEREFORE, CAPITAL GAINS ARE ATTRACTED TO THE PROFITS EARNED ON SALE OF THE LAND; III) AS PER THE DEPARTM ENTAL REPRESENTATIVE, THE AO IS AWARE OF THE SAID CELEBRATED JUDGMENT OF THE SUP REME COURT IN THE CASE OF SARIFABIBI MOHAMED IBRAHIM AND OTHERS V. CIT 204 ITR 631 (SC) FOR THE PROPOSITION THAT VARIOUS TESTS IF APPLIED TO THE FA CTS OF THE CASE, THE ASSESSEE IS ENTITLED TO CLAIM EXEMPTION U/S 10(1) OF THE ACT ; (IV) LD DR VEHEMENTLY MENTIONED THAT THE LAND IN QUESTION WITH PURCHASE C OST OF 1.43 LAKHS AND WAS PURCHASED JUST 27 MONTHS BACK WHICH IS SOLD FOR R.1 1.11 LACS CANNOT BE SAID TO BE THE AGRICULTURAL LAND AND IMPUGNED SALE TRANS ACTION CANNOT BE HELD TO BE NON COMMERCIAL TRANSACTION. AT THE END, LD DR IS OF THE OPINION, THE AO HAS RIGHTLY ASSUMED JURISDICTION U/S 147 OF THE ACT. 25. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES ALONG WITH THE PAPER BOOKS AVAILABLE BE FORE US. IN OUR OPINION, IT IS RELEVANT TO EXTRACT (1) THE REASONS RECORDED BY THE ASSESSING OFFICER AVAILABLE AT PAGE 4 OF THE PAPER BOOK 1; AND (2) O BJECTIONS RAISED BY THE ASSESSEE AND MEETING OF THE SAME BY THE ASSESSING O FFICER VIDE HIS ORDER DT. 5-7-2007. FIRST WE TAKE UP THE REASONS AT SL NO 1 A BOVE. REASONS RECORDED BY THE ASSESSING OFFICER FOR ISS UE OF NOTICE U/S 148 OF THE I.T.ACT. DURING THE YEAR ASSESSEE HAS SOLD AGRICULTURAL LA ND BEARING NO.9.4, KANDARI BHUSAWAL FOR RS.11,11,000 ON 21-2-2003. THE LAND W AS PURCHASED ON 12-10-2000 FOR RS.1,43,000/- ASSESSEE HAS HELD THE LAND FOR JUST 28 MONTHS. ASSESSEE IS NOT AN AGRICULTURIST . FURTHER ON THE SAME DAY OF SALE OF THIS LAND ASS ESSEE HAS PURCHASED ANOTHER AGRICULTURAL LAND FOR RS.2,00,000 . ASSESSEE HAS NOT OFFERED FOR TAXATION THE PROFIT ON SALE OF THE ABOVE LAND WHICH WORKS OUT TO RS.9,68,000/- ON THE GROUND THAT IT IS NOT A CAPITA L ASSET. ASSESSEE IS NOT AN MRS.SUNAND A U.CHAUDHARY AGRICULTURIST BY PROFESSION. THE AGRICULTURAL LAND SOLD WAS HELD FOR LESS THAN THREE YEARS. FURTHER ON THE VERY DAY OF THE SALE OF THE LAND ASSESSEE HAS PURCHASED ANOTHER AGRICULTURAL LAND. THESE FACTS INDICATE TH AT ASSESSEE IS CARRYING ON THE BUSINESS OF PURCHASE AND SALE OF AGRICULTURAL LAND AND THEREFORE THE AC TIVITY IS AN ADVENTURE IN THE NATURE OF TRADE OR BUSINESS AND INCOME FROM THE SAME IS TAXABLE AS BUSINESS INCOME . IN RESPONSE TO THE ABOVE REASONS OF THE AO FOR ISSU E OF NOTICE U/S 148 OF THE ACT, THE ASSESSEE FILED THE FOLLOWING OBJECTION TO THE SAID ISSUE OF THE NOTICE. THE POINTS RAISED BY THE ASSESSEE ARE SUMMARIZED AS BELOW. 1) THE LAND BEARING SURVEY NO.145/3, KANDARI WAS PU RCHASED IN 2000-01 AND IS CLASSIFIED AS AGRICULTURAL LAND. SHE HAD BEEN USING THE AID LAND FOR CULTIVA TION AND THE INCOME DERIVED THERE FROM HA BEEN INCLUDED IN H ER RETURN OF INCOME. THE SAID LAND HAS BEEN ACQUIRED AND HELD AS AN INVESTMENT AN D NOT AS ANY STOCK IN TRADE. 2) THAT SHE HAVE NEVER CARRIED OUT ANY TRADE OR ADVENTURE N THE NATURE OF TRADE IN PROPERTIES. 3) THAT THE SAID AGRICULTURAL LAND WAS SOLD AS CAPITAL INVESTMENT AND NOT AS A STOCK IN TRADE. 4) THAT THE SALE OF AGRICULTURAL LAND IN QUESTION W AS AN ISOLATED TRANSACTION OF PURCHASE AND SALE OF PROPERTY. 5) THAT THE CHARACTER OF THE LAND REMAINED THE SAME FROM THE DATE OF PURCHASE TO THE DATE OF SALE. 6) THAT THE LAND WAS SOLD NOT WITH THE INTENTION TO MAKE PROFITS BUT IT HAD BECOME INCONVENIENT AND DIFFICULT TO CARRY OUT AGRI CULTURE ACTIVITIES IN THE SAID LOCALITY DUE TO UNCONGENIAL CIRCUMSTANCES PREVAILING IN THE AREA. THEREAFTER SHE PURCHASED ONE MORE AGRICULTURAL LAND TO CONTINUE TO CARRY ON THE AGRICULTURAL ACTIVITY. BOTH THE TRANSACTIONS ARE AS INVESTMENT AND NOT AS COMMERCIA L COMMODITIES OR AS A DEALER OF PROPERTIES. 7) IN SUPPORT OF HER CLAIM THAT THE SURPLUS ACCRUIN G ON SALE OF THE LAND IS CAPITAL ACCRETION AND NOT BUSINESS INCOME SHE HAS QUOTED TH E BELOW MENTIONED JUDGMENTS I) FORT PROPERTIES PVT.LTD. V. CIT 208 ITR 232 (BOM) II) G.VENKATASWAMI NAIDU AND CO. V. CIT 35 ITR 594 (SC) III) JANKI RAM BAHADUR RAM 57 ITR 21 (SC) IV) RAJA BAHADUR KAMAKHYA NARAIN SINGH V CIT77 ITR253 ( SC) V) CIT V DHABLE, BOBDE PORSE, ORS 202 ITR 98 (SC) VI) CIT V PRINCIPAL OFFICER LAXMI SURGICAL P LTD 202ITR 601 (SC) SPECIFIC ATTENTION OF THE ASSESSING OFFICER IS INVI TED ON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF SIEMENS INDIA LTD. V. ITO 143 ITR 120 WHEREIN IT IS HELD THAT NOT TO FOLLOW THE DECISION OF THE HIGH COURT WITHIN WHOSE JURISDICTION THE ITO ACTS, WOULD TANTAMOUNT TO COMMITTING CONTEMPT OF TH AT COURT. THE OBJECTION RAISED BY ASSESSEE AGAINST ISSU E OF THE NOTICE U/S 148 DT.4-12- 2006 IS REJECTED FOR THE FOLLOWING REASONS; 1) ASSESSEE PURCHASED THE AGRICULTURAL LAND AT KANDARI IN OCTOBER 2000. ASSESSEE IS NOT AN AGRICULTURIST AND NEITHER HELD A NY AGRICULTURAL LAND PREVIOUSLY. 2) THE LAND AT KANDARI WAS SOLD WITHIN THREE YEARS OF HOLDING IT AND ON THE VERY SAME DAY OF ITS SALE ASSESSEE PURCHASED ANOTHER AGR ICULTURAL LAND. 3) THE AGRICULTURAL LAND WAS PURCHASED FOR ONLY RS.1,4 3,000/- AND WITHIN 28 MONTHS IT HAS BEEN SOLD FOR RS.11,11,000/- I.E. APP RECIATION OF NEARLY NINE TIMES WITHIN 28 MONTHS. 4) THE SALE OF AN AGRICULTURAL LAND AT SUBSTANTIALLY H IGH PRICE WITHIN 28 MONTHS OF ITS PURCHASE AND SUBSEQUENT PURCHASE OF ANOTHER AGR ICULTURAL LAND ON THE VERY SAME DAY OF SALE OF THE EARLIER AGRICULTURAL LAND I S SUFFICIENT EVIDENCE/INDICATOR THAT ASSESSEE IS INDULGING IN THE ACTIVITY OF ADVEN TURE IN THE NATURE OF TRADE WITH THE MOTIVE TO EARN INCOME/PROFIT. 5) THE CASE LAWS QUOTED BY THE ASSESSEE ARE GONE THROU GH AND IT IS FOUND THAT ALL THOSE CASES INVOLVED ONLY A SOLITARY TRANSACTIO N OF PURCHASE AND SUBSEQUENT SALE OF A LAND/ASSET. THE ASSESSEES CA SE IS DIFFERENT. SHE HAS PURCHASED AND SOLD A LAND AND HAS AGAIN PURCHASED A NOTHER LAND ON THE VERY SAME DAY OF SALE OF THE EARLIER LAND HELD BY HER. THE FACTS OF THE CASES MRS.SUNAND A U.CHAUDHARY QUOTED BY ASSESSEE AREA DIFFERENT FROM THAT OF HER CASE AND THEREFORE THOSE DECISIONS ARE NOT APPLICABLE IN HER CASE .. IN VIEW OF THE ABOVE, THE AO REJECTED THE OBJECTION S RAISED BY THE ASSESSEE AGAINST THE ASSUMPTION OF JURISDICTION. AS PER THE AO, EVEN AN ISOLATED TRANSACTION CAN BE AN ADVENTURE IN THE NATURE OF TR ADE AND RELIED ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF G.VENKATA SWAMI NAIDU & CO. V. CIT 35 ITR 594 (SC). 26. TO SUMMARISE, THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE IS AN AGRICULTURIST AND THE LAND IN QUESTION IS AGRICULTU RAL IN NATURE AND EARNED AGRICULTURAL INCOME OF RS 15,000/- AND THE SALE TRA NSACTION IS NOT AN ADVENTURE IN THE NATURE OF TRADE AS PROPOSED BY THE AO. ON THE OTHER HAND, THE CASE OF THE REVENUE IS THAT THE ASSESSEE IS NOT AN AGRICULTURIST AND LAND IN QUESTION WAS NOT USED FOR AGRICULTURAL PURPOSES. AP EX COURTS DECISION SUPPORTS THE VIEWS OF AO. THEREFORE, THE AO RIGHTL Y ASSUMED JURISDICTION U/S 147 OF ACT. 27. WHAT ARE AVAILABLE TO THE AO FOR FORMATION OF T HE REASONS TO BELIEF FOR RECORDING THE REASONS AND ISSUE OF NOTICE U/S 148 O F THE ACT. (I) PAGE 17 OF THE PAPER BOOK: THIS IS A HAND WRITTEN NOTE ENCLOSE D TO THE RETURN. IT INDICATES THAT THE ASSESSEE IS A LADY AND ENTERED INTO A SALE TRANSACTION OF THE SAID LAND, WHICH IS CONSIDERED BY HER AS AN AGRICULTURAL LAND, HENCE NOT A CAPITAL ASSET AND THEREFORE, EXEMPT FROM TAX; ASSESSEE ALSO ENCLO SED COPY OF THE RELEVANT 7/12 EXTRACT; (II) AS ARGUED BY THE DR, AO OFFICIAT ING FROM THE SAME STATION IS AWARE OF THE LOCATION OF THE LAND IN QUESTION IE LO CATED IN KANDARI WITH SURVEY NO 145/3 AND ALSO ITS PROXIMITY TO THE DEVELOPING LOCATIONS OF NEW HOUSING AREAS, JALGOAN. (III) AO IS IN KNOWN OF THE CITED A PEX COURTS JUDGMENT IN THE CASE OF SMT.SAARIFABIBI MOHAMED IBRAHIM AND OTHERS (SUPRA); (IV) AO IS ALSO IN POSSESSION OF VERY SPECIFIC INFORMATION RELATING TO THE IMPUGNED LAND AND THE SALE TRANSACTION IE ABOUT ITS LOCATION, HOLDING PERIOD OF 28 MONTHS IN THE HANDS OF THE ASSESSEE, PURCHASE AND SALE CONSIDERAT IONS OF THE LAND, PROFIT OF RS.9,68,000/-, REINVEST OF THE SAID PROFIT TO THE E XTENT OF RS 2 LAKHS IN ANOTHER LAND ETC. AO IS ALSO OF THE VIEW THAT THE ASSESSEE BEING A LADY IS NOT AN AGRICULTURIST BY PROFESSION. CONSIDERING THE ABOVE FACT, IT APPEARS THAT THE AO FORMED AN OPINION THAT THE ASSESSEE IS CARRYING ON THE BUSINESS OF PURCHASE AND SALE OF AGRICULTURAL LAND AND THEREFORE THE AC TIVITY IS AN ADVENTURE IN THE NATURE OF TRADE OR BUSINESS AND INCOME FROM THE SAME IS TAXABLE AS BUSINESS INCOME . WE HAVE TO DECIDE IF THE SAID BELIEF IS ERRONEOUS OR OTHERWISE AND THE SAID INFORMATION IS SUFFICIENT ENOUGH FOR GENERATING A REASON TO BELIEVE AS MENTIONED IN THE SECTION 147 OF THE MRS.SUNAND A U.CHAUDHARY INCOME TAX ACT, 1961 RELATING TO INCOME ESCAPING ASSESSMENT. WE HAVE ALSO PERUSED THE SUPREME COURT JUDGMENT IN THE CASE OF JOTI PARSHAD VS. STATE OF HARYANA 1992-(SC2)-GJX-0657-SC FOR DETAILE D MEANING OF THE EXPRESSION REASON TO BELIEVE AS DEFINED BY THE SE CTION 26 IPC. IT IS THE FINDING OF THE HONBLE COURT THAT SUSPICION OR DOUBT OR BELIEVING CANNOT BE EQUATED WITH THE EXPRESSION REASON TO BELIEVE. FOR THE ELUCIDATION ON THE EXPRESSION REASON TO BELIEVE IN SEC. 26 OF THE IP C, WE REPRODUCE THE RELEVANT PARTS WHICH ARE AS UNDER:- SECTION 26 IPC EXPLAINS THE MEANING OF THE WORDS REASON TO BELIEVE THUS: 26. REASON TO BELIEVE A PERSON IS SAID TO HAV E REASON TO BELIEVE A THING, IF HE HAS SUFFICIENT CAUSE TO BELIEVE THAT T HING BUT NOT OTHERWISE. IN SUBSTANCE WHAT IT MEANS IS THAT A PERSON MUST H AVE REASON TO BELIEVE IF THE CIRCUMSTANCES ARE SUCH THAT A REASON ABLE MAN WOULD, BY PROBABLE REASONING, CONCLUDE OR INFER REGARDING THE NATURE OF THE THING CONCERNED. SUCH CIRCUMSTANCES NEED NOT NECESSARILY BE CAPABLE OF ABSOLUTE CONVICTION OR INFERENCE, BUT IT IS SUFFICIENT IF TH E CIRCUMSTANCES ARE SUCH CREATING A CAUSE TO BELIEVE BY CHAIN OF PROBABLE RE ASONING LEADING TO THE CONCLUSION OR INFERENCE ABOUT THE NATURE OF THE THI NG. THESE TWO REQUIREMENTS I.E., KNOWLEDGE AND REASON TO BELIEVE HAVE TO B E DEDUCTION FROM VARIOUS CIRCUMSTANCES IN THE CASE. 28. FROM THE SUPREME COURT DECISION IN THE CASE OF JOTI PARSHAD (SUPRA) THAT THE SUSPICION OR DOUBT OR MERE SEEING C ANNOT BE EQUATED TO BELIEVING. FROM THE EXPLANATION GIVEN IN SEC. 26 OF THE IPC, SUFFICIENT CAUSE TO BELIEVE IS AN ESSENTIAL INGREDIENT OF REASON T O BELIEVE. THE CIRCUMSTANCES ALSO ASSUME THE IMPORTANCE IN THIS MATTER OF FORMAT ION OF REASON TO BELIEVE AS PER THE ABOVE JUDGMENT OF THE SUPREME COURT OF INDI A. THE CIRCUMSTANCES MUST GIVE RISE TO KNOWLEDGE ABOUT THE THING AND REA SON TO BELIEVE ABOUT IT. 29. CONSIDERING THE ABOVE WISDOM FROM THE SUPREME C OURT, WE HAVE PERUSED, IF THE A.O INFORMATION ON THE FOLLOWING IN FORMATION IS ADEQUATE ENOUGH FOR SPRINGING REASON TO BELIEF IE (I) THE K NOWLEDGE ABOUT THE IMPUGNED TRANSACTION OF PURCHASE OF THE LAND IN THE YEAR 2000 FOR SUM OF RS 1.43 LAKHS, (II) THE LAND IS LOCATED CLOSE TO THE R ESIDENTIAL ZONE AND OF COURSE UNSUITABLE FOR AGRICULTURAL PURPOSES, (III) HOLDING OF THE SAME FOR 27 MONTHS TILL FEBRUARY 2003 WITHOUT ANY AGRICULTURAL ACTIVITY; ( IV) SALE OF THE SAME TO MR PRAVIN B CHAUDARY FOR SUM OF RS 11.11 LAKHS UNDISPU TEDLY FOR USE OF THE SAME FOR HOUSING PLOTTING PURPOSES AFTER DUELY OBTAINING NA BY SRI PRAVIN B CHAUDARI IMMEDIATELY AFTER TAKING THE POSSESSION OF THE LAND; (V) AO IS WELL AWARE FROM THE RETURN AND ITS ANNEXURE, AT THE RECO RDING OF THE REASONS, THAT THE ASSESSEE IS A LADY AND SHE HAS NO OTHER AGRICUL TURAL LAND EXCEPT THE ONE UNDER DISPUTE CLAIMED AS AGRICULTURAL LAND. CONSIDE RING ALL THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THE AO HAS RIGHTLY FORMED REQUISITE BELIEVE OR REASON TO BELIEVE THAT THE INC OME HAS ESCAPED ASSESSMENT FOR THE A.Y. 2000-01. SO FAR AS THE CASE LAWS CITED BY THE ASSESSEES AO, WE MRS.SUNAND A U.CHAUDHARY HAVE ALREADY HELD THAT THEY ARE DISTINGUISHABLE ON FACTS. THEREFORE, THE NOTICE ISSUED BY THE AO FOR THE REASON RECORDED ARE VALID AND THEREFORE, THE GROUND ONE RAISED BY THE ASSESSEE IS DISMISSED . III. ADDITIONAL GROUND - DEDUCTION U/S 54B OF THE ACT 30. THIS GROUND IS RAISED WITHOUT PREJUDICE TO THE OTHER TWO GROUNDS RAISED ORIGINALLY IN THE APPEAL. CONSIDERING THE FACT THE SAME IS LEGAL IN NATURE AND ADJUDICATION OF THE DOES NOT CALL FOR ANY INVESTIGA TION INTO THE FACTS, IN OUR OPINION, THE ASSESSEE IS ENTITLED TO RAISE THE SAME BEFORE US AND THEREFORE, WE PROCEED TO ADMIT THE SAME. ON ADMISSION, LD DR FOR THE REVENUE OPPOSED VEHEMENTLY STATING THAT THE ADMISSION OF THE ADDITI ONAL GROUND MERELY AN ACADEMIC EXERCISE AS THE IMPUGNED LAND WAS NEVER US ED BY THE ASSESSEE IN THE PRECEDING TWO YEARS FOR AGRICULTURAL USE AND TH EREFORE THERE IS APPLICATION OF THE PROVISIONS OF SECTION 54B OF THE ACT IN RESP ECT OF THE UTILIZED SUM OF RS 2 LAKHS FOR PURCHASE OF THE ANOTHER LAND ON THE SAM E DATE IE 21.2.2003. THE IMPUGNED LAND WAS PURCHASED ON 12-10-2000. THE PROV ISIONS OF SECTION 54B MANDATES FOR EXAMINING IF THE LAND IE ORIGINAL ASSET IN QUESTION WAS USED FOR AGRICULTURAL PURPOSES IN PRECEDING TWO YEA RS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET IE FROM FEBRUARY 200 1 ONWARDS. IN THIS REGARD, OUR FINDING ARE CLEAR THAT THE SAID LANDS ARE NOT U SED FOR AGRICULTURAL PURPOSES BY THE ASSESSEE DURING HER HOLDING PERIOD AND THUS, THE ANSWER IS NEGATIVE AND AGAINST THE ASSESSEE. DETAILS ARE DISCUSSED IN THE PRECEDING PARAGRAPHS OF THIS ORDER. SINCE THE LAND SOLD IS NON AGRICULTURAL ONE, CONSEQUENTLY, THE QUESTION OF APPLICATION OF THE PROVISIONS OF SECTIO N 54B TO THE IMPUGNED CAPITAL GAINS DOES NOT ARISE. THEREFORE, WE FIND ME RIT IN THE ARGUMENT OF THE DR. ACCORDINGLY, THE ADDITIONAL GROUND ADMITTED IS DISMISSED . 31. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 3 RD OCTOBER 2011. SD/- SD/- (SHAILENDRAKUMAR YADAV) (D.KARUNAKARA RAO ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 03-10-2011 COPY TO:- 1) ASSESSEE 2) THE ACIT, CIRCLE 2, AURANGABAD 3) THE CIT (A) AURANGABAD 4) THE CIT CONCERNED 5) THE DR, B BENCH, I.T.A.T., PUNE BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., PUNE