M/s. Agrawal Sarees, Nashik V. Additional Commissioner of Income-tax,

ITA 1531/PUN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0408 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-09-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 23-11-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMITRA BANERJI
• Keywords: Capital asset; Business income; Cost of acquisition; Capital receipt
• Section: 2(14); 54

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 1 531 /PN/201 5 / ASSESS MENT YEAR : 20 11 - 12 M/S. AGRAWAL SAREES, 4, RAMRAJYA BUILDING, NEAR BHONSALA MILITARY SCHOOL, COLLEGE ROAD, NASHIK - 422005 . / APPELLANT PAN: A AJFM4969R VS. THE JT . COMMISSIONER OF INCOME TAX , RANGE 1, NASHIK . / RESPONDENT RANGE 1, NASHIK . / RESPONDENT / APPELLANT BY : S HRI SANKET JOSHI / RESPONDENT BY : SMT. SUMITRA BANERJI / DATE OF HEARING : 1 9 . 1 0 .201 6 / DATE OF PRONOUNCEMENT: 30 . 1 1 .201 6 / ORDE R PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 1 , NASHIK , DATED 2 4 . 0 9 .20 1 5 RELATING TO ASSESSMENT YEAR 20 11 - 12 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 2 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S OF APPEAL : - ON FACTS AND IN LAW, ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITIONS OF RS.34,46,000/ - MADE BY THE LEARNED A.O. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE INCOME ARISING ON SALE OF AGRICULTURAL LAND AT GAT NO.156/1/2 AT JALALPUR WAS TAXABLE AS BUSINESS INCOME OF THE ASSESSEE AS AGAINST CAPITAL RECEIPT NOT CHARGEABLE TO TAX CLAIMED BY THE ASSESSEE. 3] THE LEARNED CIT(A) ERRED IN HOLDING THAT AS PER THE SUPPLEMENTARY DEED DATED 08 .03.2010, 'DEALING IN LAND' WAS INTRODUCED AS ONE OF THE MAIN OBJECTIVES OF THE ASSESSEE FIRM AND HENCE, THE INCOME ARISING ON SALE OF THE ABOVE LAND ON 08.03.2011 WAS IN THE NATURE OF BUSINESS INCOME OF THE ASSESSEE. THE ASSESSEE. 4] THE LEARNED CIT(A) FAILED TO AP PRECIATE THAT THE INTENTION OF THE ASSESSEE AT THE TIME OF PURCHASE OF THE ABOVE AGRICULTURAL LAND WAS TO INVEST FUNDS FOR EARNING LONG TERM GAINS AND NOT EARNING QUICK PROFITS BY TRADING IN THE SAME AND HENCE, THE INCOME ARISING ON SALE OF THE ABOVE LAND WAS NOT IN THE NATURE OF BUSINESS INCOME. 5] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE INCOME ARISING ON SALE OF THE ABOVE LAND WAS NOT IN THE NATURE OF BUSINESS INCOME FOR THE FOLLOWING REASONS A . THE LAND PURCHASED BY THE ASSESSEE WAS HE LD BY THE ASSESSEE FOR A SUBSTANTIAL PERIOD OF MORE THAN THREE YEARS WHICH SHOWS THAT THE A SUBSTANTIAL PERIOD OF MORE THAN THREE YEARS WHICH SHOWS THAT THE INTENTION OF THE ASSESSEE WAS NOT TRADING IN LAND. B . THE SAID LAND WAS SHOWN UNDER THE HEAD 'INVESTMENT' IN THE BALANCE SHEET. C . THE FREQUENCY OF LAND TRANSACTIONS I N THE CASE OF THE ASSESSEE IN THE EARLIER YEARS WAS VERY NEGLIGIBLE I.E. AT THE MOST, ONE LAND SALE IN A YEAR. D . AT THE TIME OF PURCHASE OF THE ABOVE LAND ON 21.02.2008, 'DEALING IN LAND' WAS NOT THE MAIN O BJECT OF THE ASSESSEE FIRM AS PER THE PARTNERSHI P DEED DATED 01.10.2006 AND THIS FACT ALSO SHOWS THAT THE INTENTION OF THE ASSESSEE AT THE TIME OF PURCHASE SHOWS THAT THE INTENTION OF THE ASSESSEE AT THE TIME OF PURCHASE OF THE LAND WAS TO INVEST FUNDS AND NOT TRADING IN LAND. E . THE ASSESSEE HAD NOT UTILISED ANY INTEREST BEARING FUNDS FOR PURCHASE OF THE SAID LAND. 6] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT A TRADER CAN HOLD TWO PORTFOLIOS, ONE OF INVESTMENT AND ONE OF TRADING AS HELD BY HON'BLE BOMBAY H.C. AND HENCE, MERELY BECAUSE 'DEALING IN LAND' WAS INTRODUCED AS ONE OF THE MAIN OBJECTS VIDE SUPPLEME NTARY DEED DATED 08.03.2012, THERE WAS NO REASON TO HOLD THAT THE INCOME ARISING ON SALE OF THE ABOVE LAND WAS IN THE NATURE OF BUSINESS INCOME WHEN ALL THE RELEVANT DECIDING FACTORS SUGGESTED OTHERWISE. ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 3 7] THE LEARNED CIT(A) FURTHER ERRED IN NOT APPRECIA TING THAT THE AGRICULTURAL LAND SOLD BY THE ASSESSEE WAS SITUATED OUTSIDE EIGHT KILOMETERS FROM THE MUNICIPAL LIMITS OF NASHIK AS PER THE CERTIFICATE ISSUED BY TALATHI, JALALPUR AND HENCE, THE SAID LAND WAS NOT A CAPITAL ASSET U/S 2(14) AND HENCE, THE INCO ME ARISING ON SALE OF THE ABOVE LAND WAS NOT TAXABLE UNDER THE ACT. 8] THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADHOC DISALLOWANCE OF EXPENSES MADE BY THE A.O. TO THE EXTENT OF RS.35,000/ - WITHOUT APPRECIATING THAT NO DISALLOWANCE WAS WARRANTED ON FACTS OF THE CASE. 3. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE ADDITION MADE OF RS.34,46,000/ - ON ACCOUNT OF SALE OF AGRICULTURAL LAND. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,22,402/ - . THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY. THE ASSESSING OFFICER HAD RECEIVED INFORMATION THROUGH AIR THAT THE ASSESSEE HAD SOLD LAND AND HAD NOT DECLARED THE SAME IN THE PROFIT & LOSS ACCOUNT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE SALE OF LAND AT JALALPUR WAS FOR TOTAL CONSIDERATION OF RS. 77,21,000/ - . THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAME SHOULD NOT BE TREATED AS CAPITAL GAINS. IN REP LY, THE ASSESSEE SUBMITTED THAT THE LAND SOLD AT JALALPUR HAD POPULATION OF 2359 ONLY AS PER GRAMPANCHAYAT CENSUS CERTIFICATE AND WAS SITUATED EIGHT KILOMETERS FROM THE NASHIK MUNICIPAL CORPORATION AND HENCE, IT WAS NOT COVERED UNDER SECTION 2(14)(III) OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FIRM HAD CHANGED ITS NAME VIDE SUPPLEMENTARY DEED AND DECLARED ITS BUSINESS OF LAND DEVELOPMENT IN ADDITION TO BUSINESS OF SAREES. IN VIEW THEREOF, THE ASSESSEE WAS ASKED TO CLARIFY AS TO WHY THE SAID INCOME SHOULD NOT BE TREATED AS BUSINESS INCOME OR AS ADVENTURE IN THE NATURE OF TRADE. THE ASSESSEE OBJECTED TO THE SAID CONTENTION. HOWEVER, THE ASSESSING OFFICER IN VIEW OF SUPPLEMENTARY DEED, WHEREIN THE PRINCIPAL ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 4 BUSINESS OF THE FIRM WAS STAT ED TO BE DEVELOPER AND REAL ESTATE ALONG WITH OTHER BUSINESS OF TRADING IN CLOTH, SAREES, DRESS MATERIAL, ETC., HELD THAT THE SALE OF LAND HAD LOST ITS CHARACTER AS CAPITAL ASSETS AS THE MANIFEST INTENTION WAS TO ENTER INTO TRADING AND EARN PROFIT OUT OF I T. THE ASSESSING OFFICER DID NOT BELIEVE THE CASE OF ASSESSEE THAT IT WAS AN INVESTMENT AND ALSO NOTED THE FACT THAT THE LAND WAS SITUATED WITHIN EIGHT KILOMETERS OF MUNICIPAL LIMITS OF NASHIK MUNICIPAL CORPORATION. THE SAID LAND WAS NOT AN AGRICULTURAL LAND AND WAS FALLING WITHIN URBAN CONGLOMERATION. THE ASSESSEE WAS ALSO NOT INVOLVED IN ANY AGRICULTURAL ACTIVITY AND IN VIEW THEREOF, THE GAIN ARISING FROM THE SAID ASSET WAS TREATED AS INCOME FROM BUSINESS. 5. BEFORE THE CIT(A), THE LEARNED AUTHORI ZED REPRESENTATIVE FOR THE ASSESSEE AGREED THAT THE LAND IN CONSIDERATION WAS WITHIN EIGHT KILOMETERS OF MUNICIPAL CORPORATION OF NASHIK. HOWEVER, HE STRESSED THAT THE PROFIT ARISING ON SALE OF LAND SHOULD BE CONSIDERED AS LONG TERM CAPITAL GAINS AND NOT AS BUSINESS INCOME. THE CIT(A) OBSE RVED THAT BECAUSE OF ADMISSION OF ASSESSEE, THE PROFIT ON SALE OF LAND WAS TAXABLE AND NOT EXEMPT UNDER SECTION 2(14) OF THE ACT SINCE THE LAND WAS SITUATED WITHIN EIGHT KILOMETERS OF MUNICIPAL CORPORATION OF NASHIK . WI TH REGARD TO THE ISSUE WHETHER PROFIT ON SALE OF LAND WAS TO BE TAXED AS BUSINESS INCOME OR LONG TERM CAPITAL GAINS, THE CIT(A) TOOK NOTE OF THE TERMS OF PARTNERSHIP DEED AND IN VIEW OF THE SUPPLEMENTARY DEED MADE EFFECTIVE FROM 24.02.2010, WHERE THE PRINC IPAL BUSINESS OF THE FIRM WAS RETAIL AND WHOLESALE OF SAREES, CLOTH, DRESS MATERIAL, ETC. AND ALSO DEVELOPMENT OF REAL ESTATE, IT WAS HELD THAT THE ASSESSEE WAS DEVELOPER, DEALER, AGENT IN REAL ESTATE, THEREFORE, PURCHASE AND SALE OF LAND WAS TO BE TAKEN A S ITS NORMAL BUSINESS ACTIVITY. THE CONTENTION OF ASSESSEE THAT THE LAND IN QUESTION WAS ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 5 PURCHASED BEFORE EXECUTION OF SUPPLEMENTARY DEED AND SHOULD BE CONSIDERED AS INVESTMENT, WAS NOT ACCEPTED IN THE ABSENCE OF ANY EVIDENCE BEING PRODUCED BY THE ASSESSE E. FURTHER CONTENTION OF THE ASSESSEE THAT THE LAND WAS BEING REFLECTED IN THE BALANCE SHEET AS INVESTMENT WAS HELD TO BE NOT DETERMINATIVE OF TRUE NATURE OF TRANSACTION BY THE CIT(A), WHERE THE INTENTION OF ASSESSEE WAS TO DEAL WITH THE LAND ITSELF. ACC ORDINGLY, THE SAME WAS ASSESSED AS INCOME FROM BUSINESS. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) AND HAS RAISED THE GROUNDS OF APPEAL NO.1 TO 7 IN THIS REGARD. THE GROUND OF APPEAL NO.8 RAISED BY THE ASSESSEE IS NOT PRESSED AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT ADMITTEDLY, NO AGRICULTURAL ACTIVITY WAS BEING CARRIED OUT BUT THE SAID PROPERTY WAS BEING HELD BY THE ASSESSEE AS INVESTMENT. OUT OF FOUR TRA NSACTIONS OF PURCHASE OF DIFFERENT PIECES OF LAND, ONLY ONE LAND WAS SOLD DURING THE YEAR AND THE SAME IS CAPITAL ASSET AND THE GAIN ARISING THEREFROM IS TO BE ASSESSED AS INCOME FROM CAPITAL GAINS. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVEN UE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF CIT(A). 9. ON PERUSAL OF RECORD AND AFTER HEARING BOTH THE LEARNED AUTHORIZED REPRESENTATIVES, THE ISSUE WHICH NEEDS ADJUDICATION IN THE PRESENT APPEAL IS THE ASSESSABILITY OF PROFIT ARISING ON SALE OF LAND, WHETHER THE SAME IS TO BE ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 6 ASSESSED AS INCOME FROM BUSINESS OR INCOME FROM CAPITAL GAINS. THE ASSESSING OFFICER HAD RECEIVED AIR DATA THAT THE ASSESSEE HAD SOLD LAND AT JALALPUR AND THE ASSESSEE HAD NOT DECLARED ANY GAIN / PROFIT ON THE SALE OF SAID LAND IN THE RETURN OF INCOME. THE INITIAL CLAIM OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW WAS THAT THE SAID LAND IS AN AGRICULTURAL LAND AND SITUATED BEYOND EIGHT KILOMETERS FROM THE MUNICIPAL LIMITS AND HENCE, IS OUTSIDE THE PURVIEW OF CAPITAL GA INS. HOWEVER, THE FINDINGS OF ASSESSING OFFICER AND CIT(A) AND AS ADMITTED BY THE ASSESSEE, THE LAND IS SITUATED WITHIN EIGHT KILOMETERS FROM THE MUNICIPAL LIMITS OF NASHIK MUNICIPAL CORPORATION, HENCE, THE SAME IS TO BE ASSESSED AS INCOME FROM CAPITAL G AINS. THE ASSESSEE IN THIS REGARD PLACED RELIANCE ON THE DECLARATION MADE IN THE BALANCE SHEET FILED BY THE ASSESSEE, UNDER WHICH THE SAID LAND HAS BEEN SHOWN AS INVESTMENT. THE COPY OF BALANCE SHEET IS AVAILABLE ON RECORD. THE CASE OF REVENUE ON THE O THER HAND, IS THAT THE ASSESSEE INITIALLY WAS CARRYING ON THE BUSINESS OF SALE AND PURCHASE OF CLOTH, SAREES, GARMENTS, ETC., BUT BY WAY OF SUPPLEMENTARY DEED WHEN THE NAME OF CONCERN WAS CHANGED, THE PRINCIPAL BUSINESS OF ASSESSEE WAS STATED TO BE SALE AN D PURCHASE OF LAND. THE COPY OF SUPPLEMENTARY DEED DATED 08.03.2010 IS PLACED ON RECORD AT PAGE 6 TO 16 OF PAPER BOOK. THE PERUSAL OF SAID DEED REFLECTS THAT THE ASSESSEE HAD DECIDED TO MODIFY CLAUSE NOS.2 AND 3 OF EARLIER PARTNERSHIP DEED WHICH RELATED TO THE NAME OF FIRM AND THE NATURE OF BUSINESS OF THE FIRM. THE NAME OF FIRM WAS CHANGED TO M/S. AGARWAL SAREES. THE PRINCIPAL BUSINESS OF THE FIRM WAS AGREED TO BE RETAIL AND WHOLESALE TRADING IN CLOTH, DRESS MATERIAL, SAREES, ETC. AND THE ASSESSEE WOUL D GET INVOLVED IN CONSTRUCTION, CONTRACTING AND DEVELOPMENT OF REAL ESTATE. THE COPY OF SUPPLEMENTARY DEED IS PLACED AT PAGES 7 AND 8 AND THE COPY OF PARTNERSHIP DEED IS PLACED AT PAGES 9 TO 16 OF THE PAPER BOOK. THE PROPERTY ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 7 IN QUESTION WAS PURCHASED VI DE PURCHASE DEED DATED 16.02.2008 AND WAS SOLD THROUGH SALE DEED DATED 05.03.2011. THE ASSESSEE CLAIMS THAT THE SAID LAND AS AN INVESTMENT WAS HELD FOR MORE THAN THREE YEARS AND THE GAIN ARISING FROM THE SAID LAND IS NOT IN THE NATURE OF BUSINESS O R ADVEN TURE IN THE NATURE OF TRADE. THE ASSESSEE HAS FILED AN AFFIDAVIT WHEREIN IT HAS BEEN ADMITTED TO THE FACT THAT THE LAND AT JALALPUR SOLD BY THE ASSESSEE WAS AT A DISTANCE OF ABOUT ELEVEN KILOMETERS. IN VIEW THEREOF, THE CLAIM OF ASSESSEE BEFORE THE AUTHO RITIES BELOW DOES NOT STAND THAT THE SAID LAND IS OUTSIDE THE PURVIEW OF CAPITAL ASSET AS DEFINED UNDER SECTION 2(14)(III) OF THE ACT. ANOTHER ASPECT TO BE TAKEN NOTE IS THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE ON RECORD TO ESTABLISH ANY AGRICULTU RAL ACTIVITIES BEING CARRIED OUT AT THE SAID LAND. ACCORDINGLY, THE LAND HELD BY THE ASSESSEE IS CAPITAL ASSET AND THE ISSUE OF ASSESSABILITY OF GAIN ARISING THEREFROM IS THE ISSUE IN THE PRESENT CASE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE IN THIS REGARD PLACED RELIANCE ON THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN ABHIJIT SUBHASH GAIKWAD VS. DCIT (2015) 70 SOT 429 (PUNE) . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN VIEW OF THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN ABHIJIT SUBHASH GAIKWAD VS. DCIT (SUPRA) WHERE INITIAL CLAIM OF THE ASSESSEE THEREIN WAS THAT THE LAND WAS AGRICULTURAL LAND BUT THEREAFTER SINCE NO AGRICULTURAL ACTIVITIES WERE CARRIED ON, THE GAIN WAS HELD TO BE INCOME FROM CAPITAL GAINS. 10. EVEN IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD PURCHASED THE SAID LAND IN 2008 AND HAD HELD THE SAME FOR PERIOD OF THREE YEARS. THE SAID LAND WAS SHOWN AS INVESTMENT IN THE HANDS OF ASSESSEE AND CONSEQUENTLY, GAIN ARISING THEREFRO M IS ASSESSABLE IN THE HANDS OF ASSESSEE AS INCOME FROM ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 8 CAPITAL GAINS. I FIND SUPPORT FROM THE RATIO LAID DOWN IN ABHIJIT SUBHASH GAIKWAD VS. DCIT (SUPRA), WHEREIN IT WAS HELD AS UNDER: - 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING BEFORE US IS IN RELATION TO THE ASSESSABILITY OF CAPITAL GAINS IN THE HANDS OF ASSESSEE ON SALE OF LAND. THE ASSESSEE CLAIMS TO HAVE SOLD AGRICULTURAL LAND FOR TOTAL CONSIDERATION OF RS.1,01,00,000/ - DURING THE YEAR UNDER CONSIDERATION. THOUGH IN THE RETURN OF INCOME THE ASSESSEE HAD COMPUTED THE INCOME FROM CAPITAL GAINS AND CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT, HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE PLEA OF THE ASSESSEE WAS THAT THE SAID LAND SOLD BY THE ASS ESSEE WAS AN AGRICULTURAL LAND AND HENCE OUTSIDE THE PURVIEW OF BEING TAXED UNDER THE HEAD INCOME FROM CAPITAL GAINS AS IT FELL OUTSIDE THE DEFINITION OF CAPITAL ASSET UNDER SECTION 2(14) OF THE ACT. 13. SECOND 2(14) OF THE ACT DEFINES AGRICULTURAL LAND AS UNDER: - 2. IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIRES, - (14) CAPITAL ASSET MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFESSION, BUT DOES NOT INCLUDE (I) .. (II) . (III) AGRICULTU RAL LAND IN INDIA, NOT BEING LAND SITUATE - ( A ) IN ANY AREA WHICH IS COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOWN AREA COMMITTEE, TOWN COMMITTEE, OR BY ANY OTHER NAME) OR A CANTONMENT TOWN COMMITTEE, OR BY ANY OTHER NAME) OR A CANTONMENT BOARD AND WHICH HAS A POPULATION OF NOT LESS THAN TEN THOUSAND ACCORDING TO THE LAST PRECEDING CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF THE PREVIOUS YEAR; OR ( B ) IN ANY AREA WITHIN SUCH DISTANCE, NOT BEI NG MORE THAN EIGHT KILOMETERS, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A), AS THE CENTRAL GOVERNMENT MAY, HAVING REGARD TO THE EXTENT OF, AND SCOPE FOR, URBANIZATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS, SPECIFY IN THIS BEHALF BY NOTIFICATION IN THE OFFICIAL GAZETTE; 14. UNDER THE DEFINITION, LAND, WHICH IS AGRICULTURAL LAND FALLS OUTSIDE THE PURVIEW OF BEING CAPITAL ASSET SUBJECT TO FULFILMENT OF SUB - CLAUSES (A) AND (B), WHICH INTER - ALIA PROVIDED T HAT THE LAND IN QUESTION SHOULD NOT BE WITHIN THE JURISDICTION OF A MUNICIPALITY OR CANTONMENT BOARD, ITS POPULATION OF NOT LESS THAN 10,000 PERSONS AND FURTHER IT SHOULD NOT BE IN AN AREA NOT BEING MORE THAN 8 KILOMETERS FROM THE MUNICIPAL LIMITS OR CANTO NMENT BOARD. IN THE PRESENT CASE, THE FULFILLMENT OF CONDITIONS IN CLAUSES (A) AND (B) ARE CONSIDERED TO HAVE BEEN MET I.E. THE LAND IN QUESTION IS SITUATED BEYOND 8 KILOMETERS FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD AND ALSO THE ARE A IN WHICH THE SAID LAND IS SITUATED DOES NOT HAVE POPULATION OF MORE THAN 10,000. THE ONLY QUESTION WHICH REMAINS TO BE ADJUDICATED IN THE PRESENT CASE IS WHETHER THE LAND SOLD BY THE ASSESSEE WAS AN AGRICULTURAL LAND AND WHETHER IT FALLS OUTSIDE THE DEF INITION OF CAPITAL ASSET. ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 9 15. THE HONBLE SUPREME COURT IN CIT VS. RAJA BENOY KUMAR SAHAS ROY (1957) 32 ITR 466 (SC) HAD HELD THAT AGRICULTURE IN ITS ROOT SENSE MEAN AGAR, A FIELD AND CULTURE, I.E. CULTIVATION OF A FIELD. AGRICULTURE IMPLIES EX PENDITURE OF HUMAN SKILLS AND LABOUR UPON LAND. AFTER EXHAUSTIVELY DISCUSSING THE VARIOUS CASES DEALING WITH THE SUBJECT, THE APEX COURT HELD THAT AGRICULTURE INVOLVED 'BASIC OPERATIONS', SUCH AS TILLING OF LAND, SOWING OF SEEDS, PLANTING ETC. AND 'SUBSEQ UENT OPERATIONS', SUCH AS WEEDING, TENDING, PRUNING, CUTTING, HARVESTING AND RENDERING THE PRODUCE FIT FOR MARKET. 16. FURTHER, THE HONBLE GUJARAT HIGH COURT IN CIT VS. SIDDHARTH J. DESAI (SUPRA) HAD LAID DOWN 13 TESTS TO DETERMINE WHETHER A PARTICULA R LAND IS AGRICULTURAL LAND OR NOR WHICH ARE AS UNDER: - (1) WHETHER THE LAND WAS CLASSIFIED IN THE REVENUE RECORDS AS AGRICULTURAL LAND WHETHER IT WAS SUBJECT TO THE PAYMENT OF LAND REVENUE? (2) WHETHER THE LAND WAS ACTUALLY OR ORDINARILY USED FOR AGRIC ULTURAL PURPOSES AT OR ABOUT THE RELEVANT TIME? (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 (4) WHETHER THE INCOME DERIVED FROM THE AGRICULTURAL OPERATIONS CARRIE D ON IN THE LAND BORE ANY RATIONAL PROPORTION TO THE INVESTMENT MADE IN PURCHASING THE LAND? (5) WHETHER, THE PERMISSION UNDER S.65 OF THE BOMBAY LAND REVENUE CODE WAS OBTAINED FOR THE NON - AGRICULTURAL USE OF THE 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 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 THE LAND ON THE MATERIAL DATE? (6) WHETHER THE LAND, ON THE RELEVANT DATE, HAD CEAS ED 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? (7) WHETHER THE LAND, THOUGH ENTERED IN REVENUE RECORDS, HAD NEVER BEEN ACTUALLY USED FO R AGRICULTURE, THAT IS, IT HAD NEVER BEEN PLOUGHED OR TILLED? WHETHER THE OWNER MEANT OR INTENDED TO USE IT FOR AGRICULTURAL PURPOSES? (8) WHETHER THE LAND WAS SITUATE IN A DEVELOPED AREA? WHETHER ITS PHYSICAL CHARACTERISTICS, SURROUNDING SITUATION AND US E OF THE LANDS IN THE ADJOINING AREA WERE SUCH AS WOULD INDICATE THAT THE LAND WAS AGRICULTURAL? (9) WHETHER THE LAND ITSELF WAS DEVELOPED BY PLOTTING AND PROVIDING ROADS AND OTHER FACILITIES? (10) WHETHER THERE WERE ANY PREVIOUS SALES OF PORTIONS OF THE LAND FOR NON - AGRICULTURAL USE? (11) WHETHER PERMISSION UNDER S.63 OF THE BOMBAY TENANCY AND ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 10 AGRICULTURAL LANDS ACT, 1948, WAS OBTAINED BECAUSE THE SALE OR INTENDED SALE WAS IN FAVOUR OF A NON - AGRICULTURIST? IF SO, WHETHER THE SALE OR INTENDED SALE TO SUC H NON - AGRICULTURIST WAS FOR NON - AGRICULTURAL OR AGRICULTURAL USER? (12) WHETHER THE LAND WAS SOLD ON YARDAGE OR ON ACREAGE BASIS? (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? 17. THE HONBLE GUJARAT HIGH COURT FURTHER HELD THAT AT THE RISK OF REPETITION, WE MAY MENTION THAT NOT ALL OF THESE FACTORS WOULD BE PRESENT OR ABSENT IN ANY CASE AND THAT IN EACH CASE ONE OR MORE OF THOSE FACTORS MAY MAKE APPEARANCE AND THAT THE ULTIMATE DECISION WILL HAVE TO BE REACHED ON A BALANCED CONSIDERATION OF THE TOTALITY OF CIRCUMSTANCES. 18. THE HONBLE SUPREME COU RT IN SMT. SARIFABIBI MOHMED IBRAHIM & OTHERS VS. CIT (SUPRA) HAD LAID DOWN AS UNDER: - WHETHER A PIECE OF LAND IS AGRICULTURAL LAND OR NOT IS ESSENTIALLY A QUESTION OF FACT. SEVERAL TESTS HAVE BEEN EVOLVED IN DECISIONS OF THE SUPREME COURT AND THE HIGH COURTS, BUT ALL OF THEM ARE MORE IN THE NATURE OF GUIDELINES. THE QUESTION HAS TO BE ANSWERED IN EACH CASE, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THAT CASE. THERE MAY BE FACTORS BOTH FOR OR AGAINST A PARTICULAR POINT OF VIEW. THE COURT HAS TO ANSWER THE QUESTION ON A CONSIDERATION OF ALL OF THEM A PROCESS OF EVALUATION. THE INFERENCE HAS TO BE DRAWN ON A CUMULATIVE CONSIDERATION OF ALL THE RELEVANT FACTS. CONSIDERATION OF ALL THE RELEVANT FACTS. 19. THE HONBLE BOMBAY HIGH COURT IN CIT VS. V.A. TRIVEDI (1988) 172 ITR 95 (BOM) I.E . THE DECISION RELIED UPON BY THE ASSESSING OFFICER, AFTER CONSIDERING THE FACTS OF THE CASE, IT WAS HELD THAT TO ASCERTAIN THE TRUE CHARACTER AND NATURE OF THE LAND, IT MUST BE SEEN WHETHER IT HAS BEEN PUT TO USE FOR AGRICULTURAL PURPOSES FOR A REASONABLE SPAN OF TIME, PRIOR TO THE RELEVANT DATE AND FURTHER WHETHER ON THE RELEVANT DATE THE LAND WAS INTENDED TO BE PUT TO USE FOR AGRICULTURAL PURPOSES FOR A REASONABLE SPAN OF TIME IN THE FUTURE. 20. FOLLOWING THE JUDICIAL PROPOSITION LAID DOWN BY THE HONBL E SUPREME COURT AND VARIOUS HIGH COURTS IN ORDER TO DETERMINE THE NATURE OF THE AGRICULTURAL LAND, THE FIRST AND FOREMOST TEST WAS WHETHER THE LAND WAS ACTUALLY AND ORDINARILY USED FOR THE PURPOSE OF AGRICULTURE. WHERE THE SAID LAND HAD NOT BEEN ACTUALLY CULTIVATED IN THE RECENT PAST AND / OR THERE WAS NO INTENTION OF USING THE LAND FOR AGRICULTURAL PURPOSES IN NEAR FUTURE, WAS HELD BY THE COURTS TO BE THE MOST CONCLUSIVE FEATURE TO DETERMINE THE NATURE OF LAND IN QUESTION. MERELY BECAUSE THE LAND WAS SHO WN AS AGRICULTURAL IN REVENUE RECORDS WAS HELD TO BE NOT THE CONCLUSIVE TEST TO DETERMINE THAT THE LAND WAS AGRICULTURAL LAND. 21. THE HONBLE BOMBAY HIGH COURT IN GOPAL C. SHARMA VS. CIT (SUPRA) HAD HELD AS UNDER: - THE EXPRESSION AGRICULTURAL LAND' IS NOT DEFINED IN THE INCOME TAX ACT, 1961. THE UNDERLYING OBJECT OF THE ACT TO EXEMPT AGRICULTURAL INCOME FROM INCOME TAX IS TO ENCOURAGE ACTUAL CULTIVATION OR DE FACTO AGRICULTURAL OPERATIONS. ACTUAL USE OF THE LAND FOR AGRICULTURAL PURPOSE OR ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 11 ABSENCE TH EREOF AT THE RELEVANT TIME IS UNDOUBTEDLY ONE OF THE CRUCIAL TESTS FOR THE DETERMINATION OF THE ISSUE. IT IS WELL SETTLED THAT THE NATURE AND CHARACTER OF LAND MAY UNDERGO A CHANGE DEPENDING UPON ITS SITUATION, GROWTH OF THE LOCALITY OR ZONE IN WHICH IT IS SITUATE AND ITS POTENTIALITY. THE FACT THAT THE LAND IS SOLD OR TRANSFERRED TO A NON AGRICULTURIST FOR A NON AGRICULTURAL PURPOSE OR THAT IT IS LIKELY TO BE USED FOR NON AGRICULTURAL PURPOSES SOON AFTER ITS TRANSFER IS ALSO A RELEVANT FACTOR GERMANE TO TH E DETERMINATION OF THE ISSUE. MERELY BECAUSE THE LAND WAS USED FOR AGRICULTURAL PURPOSES IN THE REMOTE PAST OR ITS CONTINUES TO BE ASSESSED TO LAND REVENUE A AGRICULTURAL LAND IS NOT DECISIVE. IN ORDER TO ASCERTAIN THE TRUE CHARACTER AND NATURE OF THE LAND IT MUST BE SEEN WHETHER THE LAND HAD BEEN PUT TO USE FOR AGRICULTURAL PURPOSES FOR A REASONABLE SPAN OF TIME PRIOR TO THE RELEVANT DATE AND FURTHER AS TO WHETHER ON THE DATE OF THE TRANSFER THE LAND IN QUESTION WAS INTENDED TO BE PUT TO USE BY THE PURCHAS ER FOR AGRICULTURAL PURPOSES FOR A REASONABLE SPAN OF TIME IN FUTURE' 22. THE JUDICIAL PRECEDENTS HAVE LAID DOWN THAT THE EXPRESSION AGRICULTURAL LAND THOUGH NOT DEFINED UNDER THE INCOME - TAX ACT, BUT WOULD BE APPLICABLE TO SUCH LAND WHERE THE ACTUAL USE R OF THE LAND WAS FOR AGRICULTURAL PURPOSES IN RECENT TIMES. JUST BECAUSE THE LAND WAS USED FOR AGRICULTURAL PURPOSES IN THE REMOTE PAST OR IT CONTINUES TO BE ASSESSED IN THE LAND REVENUE RECORDS AS AGRICULTURAL LAND IS NOT DECISIVE TO DETERMINE THE NATU RE OF LAND BEING AGRICULTURAL LAND. WHERE THE LAND HAS NOT BEEN PUT TO USE FOR AGRICULTURAL PURPOSES FOR REASONABLE SPAN OF TIME PRIOR TO THE DATE OF ITS TRANSFER, THE LAND IN QUESTION CANNOT BE HELD TO BE AGRICULTURAL LAND. THE ONUS WAS UPON THE ASSESSE E TO ESTABLISH ITS CASE OF HAVING CULTIVATED THE LAND IN RECENT PAST AND IN THE ABSENCE OF ASSESSEE HAVING DISCHARGED ITS ONUS AND MERELY BECAUSE THE LAND IS RECORDED AS AGRICULTURAL LAND IN THE REVENUE RECORDS, DOES NOT ESTABLISH THE CASE OF ASSESSEE. 23. NOW, COMING TO THE FACTS OF THE PRESENT CASE, THE ASSESSEE BEFORE THE ASSESSING OFFICER HAD FURNISHED THE COPY OF 7/12 EXTRACT, ACCORDING TO WHICH THE LAND WAS A JIRAYAT FALLOW LAND I.E. LAND BEING NOT CAPABLE OF CULTIVATION. THE 7/12 EXTRACT FURNISHE D BY THE ASSESSEE HAS BEEN SCANNED BY THE ASSESSING OFFICER, COPY OF WHICH IS PLACED AT PAGES 4 AND 5 OF THE ASSESSMENT ORDER, WHICH REFLECTS NO AGRICULTURAL ACTIVITY HAVING BEEN CARRIED ON BY THE ASSESSEE. THE ASSESSEE HAS NOT DECLARED ANY AGRICULTURAL I NCOME IN ITS HANDS NOR ANY EVIDENCE HAS BEEN PRODUCED BY THE ASSESSEE IN ANY OF THE PROCEEDINGS OR EVEN BEFORE US TO ESTABLISH THAT THE LAND IN QUESTION WAS ACTUALLY BEING USED FOR CULTIVATION AT ANY TIME OR ANY BASIC OPERATION OR SUBSEQUENT OPERATIONS WER E CARRIED OUT IN THE LAND. THE REPORT OF THE INSPECTOR WAS OBTAINED BY THE ASSESSING OFFICER, WHICH CLEARLY MENTIONED THAT THE LAND WAS NOT FIT FOR CULTIVATION WHICH HAS NOT BEEN CHALLENGED BY THE ASSESSEE. IN THE ABSENCE OF FULFILMENT OF FUNDAMENTAL FAC T THAT THE LAND WAS USED FOR AGRICULTURE, MERELY MENTIONING OF THE LAND AS AGRICULTURAL LAND IN THE PURCHASE DEED AND OR IN THE SALE DEED OR EVEN IN THE REVENUE RECORDS CANNOT ESTABLISH THE CASE OF THE ASSESSEE THAT THE LAND SOLD BY IT WAS AN AGRICULTURAL LAND. EVEN OTHERWISE, THE ASSESSEE IN THE RETURN OF INCOME HAD COMPUTED THE INCOME FROM CAPITAL GAINS AS UNDER: - FULL VALUE OF CONSIDERATION 1,01,00,000 COST OF ACQUISITION AFTER INDEXATION 4,72,572 BALANCE 96,27,428 DEDUCTION U/S 54/ 54B/ 54D/ 54EC/ 54F/ 54G 54GA 96,27,428 TAXABLE CAPITAL GAINS NIL ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 12 24. THE ASSESSEE IN THE RETURN OF INCOME HAD NOT CLAIMED THAT IT SOLD AGRICULTURAL LAND, BUT ON THE OTHER HAND HAD CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT, IN SUPPORT OF WHICH, ASSESSEE FAILED TO F URNISH ANY DOCUMENTS AND HENCE THAT CLAIM OF SECTION 54 OF THE ACT WAS HELD TO BE NOT ALLOWABLE TO THE ASSESSEE. ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE CLAIMED THAT THE SAID LAND WAS AGRICU LTURAL LAND BEING OUTSIDE THE CITY LIMITS AND IN SUPPORT THEREOF, THE NECESSARY EVIDENCE WAS FILED. HOWEVER, THE ASSESSEE FAILED TO FURNISH ON RECORD ANY EVIDENCE TO ESTABLISH ITS CASE OF HAVING CULTIVATED THE SAID LAND OR HAVING CARRIED OUT ANY AGRICULTU RAL OPERATIONS. NO AGRICULTURAL INCOME HAS BEEN DECLARED IN ANY OF THE YEAR OF HOLDING OF SUCH LAND. IN THE ABSENCE OF THE SAME AND IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE THAT THE SAID LAND SOLD BY T HE ASSESSEE IS AN AGRICULTURAL LAND AND SALE PROCEEDS OF WHICH ARE EXEMPT FROM TAX. 25. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ON THE OTHER HAND PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN HINDUSTAN INDUSTRIA L RESOURCES LTD. VS. ACIT (SUPRA), WHEREIN IT WAS HELD THAT THE FACT THAT THE ASSESSEE DID NOT CARRY OUT ANY AGRICULTURAL OPERATIONS DID NOT RESULT IN ANY CONVERSION OF THE SAID LAND INTO INDUSTRIAL LAND AND THE FINDING THAT THE LAND WAS NOT AGRICULTURAL L AND WAS REVERSED BY THE HONBLE DELHI HIGH COURT (SUPRA). HOWEVER, THE FINDING OF THE HONBLE DELHI HIGH COURT (SUPRA) IS CONTRARY TO THE FINDING OF JURISDICTIONAL HIGH COURT IN GOPAL C. SHARMA VS. CIT (SUPRA), WHICH HAS BEEN REFERRED TO BY US IN THE PARA S HEREINABOVE, WHICH IN TURN HAS BEEN RELIED UPON BY THE ASSESSING OFFICER / CIT(A) AND ALSO BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. THOUGH THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAD FILED COMPILATION OF CASE LAWS, BUT DURING THE COURSE OF HEARING HAD ONLY RELIED ON THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN HINDUSTAN INDUSTRIAL RESOURCES LTD. VS. ACIT (SUPRA). THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED (SUPRA). THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HONBLE HIGH COURT OF BOMBAY AT GOA IN CIT VS. SMT. DEBBIE ALEMAO (2011) 331 ITR 59 AND PUNE BENCH OF TRIBUNAL IN HARESH V. MILANI VS. JCIT IN ITA NO.192/PN/2003 RELATING TO ASSESSMENT YEAR 1995 - 96 REPORTED IN (2007) 111 TTJ (PUNE) 310. THE PERUSAL OF FACTS OF BO TH THE CASES REFLECT THAT IN BOTH THE ABOVE SAID DECISIONS, THE LAND WAS CULTIVATED BY THE ASSESSEE AND EVEN THE NATURE OF THE CROP IS MENTIONED. HOWEVER, IN THE FACTS OF THE PRESENT CASE BEFORE US AS POINTED OUT BY US IN THE PARAS HEREINABOVE, THE ASSESS EE HAS FAILED TO ESTABLISH WHETHER THE LAND WAS USED FOR CARRYING ON ANY AGRICULTURAL ACTIVITY. ON THE OTHER HAND, FINDINGS OF THE AUTHORITIES BELOW IS THAT THE LAND WAS IN FACT BARREN LAND, AS REPORTED IN 7/12 EXTRACT FURNISHED PRIOR TO THE COMPLETION OF ASSESSMENT AND THE LAND WAS NOT AT ALL USED FOR AGRICULTURAL ACTIVITIES AS BEING CLAIMED BY THE ASSESSEE. IN REPLY, THE CASE OF THE ASSESSEE IS THAT THE LAND IS CAPABLE OF DOING CULTIVATION AND AGRICULTURAL ACTIVITY. HOWEVER, THE ASSESSEE HAS NOT FILED ON RECORD ANY EVIDENCE OF HAVING CULTIVATED THE LAND OR ANY AGRICULTURAL ACTIVITY WAS BEING CARRIED ON EXCEPT FOR HIS CLAIM THAT THE STATUS OF THE LAND BOTH IN THE PURCHASE AND SALE DEED AND ALSO IN THE REVENUE RECORDS WAS AN AGRICULTURAL LAND. 26. IN V IEW OF THE DECISION OF JURISDICTIONAL HIGH COURT IN CIT VS. V.A. TRIVEDI (SUPRA) AND GOPAL C. SHARMA VS. CIT (SUPRA), WE FIND NO MERIT IN THE RELIANCE PLACED UPON BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ON THE RATIO LAID DOWN BY THE HON BLE DELHI HIGH COURT IN HINDUSTAN INDUSTRIAL RESOURCES LTD. VS. ACIT (SUPRA). REJECTING THE SAME, WE HOLD THAT IN THE ABSENCE OF THE ASSESSEE HAVING ESTABLISHED ITS CASE OF THE LAND SOLD BY HIM WAS AGRICULTURAL LAND, WE UPHOLD THE ORDER OF CIT(A) IN ASSES SING THE INCOME UNDER THE HEAD INCOME FROM CAPITAL GAINS AT RS.96 LAKHS. IN THE ABSENCE OF ASSESSEE HAVING FAILED TO FURNISH ANY EVIDENCE VIS - - VIS ITS CLAIM OF DEDUCTION ITA NO. 1 531 /PN/20 1 5 AGRAWAL SAREES 13 UNDER SECTION 54 OF THE ACT, THE SAME IS ALSO REJECTED. UPHOLDING THE ORDER OF CI T(A), WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 11. FOLLOWING THE SAME PARITY OF REASONING, THE ASSESSING OFFICER IS DIRECTED TO ASSESS THE GAIN ARISING FROM THE SALE OF LAND UNDER THE HEAD INCOME FROM CAPITAL GAINS. THE GROUNDS OF APPE AL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 1 2 . IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF NOVEMBER , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / P UNE ; DATED : 30 TH NOVEMBER , 201 6 . / P UNE ; DATED : 30 TH NOVEMBER , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A ) - 1 , NASHIK ; 4. / THE PR. CIT - 1 , NASHIK ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE