Dilip Battu Karanjule, Ahmednagar V. Income-tax Officer,

ITA 1960/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1115 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL; HITENDRA NINAWE
• Assessee Lawyers: S N DOSHI
• Keywords: Capital asset; Business income; Principle of natural justice; Additional evidence; Cost of acquisition
• Section: 143(3); 2(14)

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , !', $ % BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.1960/PN/2014 ASSESSMENT YEAR : 2009-10 DILIP BATTU KARANJULE, C/O M/S KADAM & CO., VEDANT 8/9, VIRAJ ESTATE, OPP. TARAKPUR BUS STAND, AHMEDNAGAR 414 003. PAN : ACDPK5361M . APPELLANT VS. THE INCOME TAX OFFICER, WARD 5(2), PUNE. . RESPONDENT / APPELLANT BY : SHRI S. N. DOSHI / RESPONDENT BY : SHRI P. L. KUREEL & SHRI HITENDRA NINAWE / DATE OF HEARING : 28.07.2016 / DATE OF PRONOUNCEMENT: 12.08.2016 & / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL FILED BY THE ASSESSEE IS AGAIN ST THE ORDER OF CIT(A)-III, PUNE DATED 17.09.2014 RELATING TO ASSES SMENT YEAR 2009-10 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT). 2. IN THIS APPEAL, THE ASSESSEE REVISED AND FILED C ONCISE GROUNDS OF APPEAL, WHICH IS REPRODUCED HEREUNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE GAIN AROSE ON SALE OF THE RURAL AGRICULTURAL LANDS CONSTITUTE BUSINESS INCOME OVERLOOKING THE FACT THAT APPELLANT BEING AN AGRICULTURIST ACQUIRED THOSE LANDS WITH THE PREDOMINANT INTENTION OF MAKIN G INVESTMENTS AND CULTIVATING THOSE AGRICULTURAL LANDS. 2 ITA NO.1960/PN/2014 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT(A) HAS ERRED IN HOLDING THAT THE AGRICULTURAL INCOME DECLARED IS NO T COMMENSURATE WITH THE QUANTUM OF LAND HOLDING AND THEREBY INFERRING THAT APPELLAN T IS NOT AGRICULTURIST. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E CIT(A) HAS ERRED IN HOLDING THAT SINCE THE PART OF THE AGRICULTURAL LAND IS UND ER CULTIVATION AND NOT THE ENTIRE LAND AND THEREFORE IT IS NOT AN AGRICULTURAL LAND. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E CIT(A) HAS ERRED IN HOLDING THAT THERE WERE FREQUENCIES OF SALE TRANSACTIONS OF AGRICULTURAL LANDS TOTALLY IGNORING THE FACT THAT UPTO ASSESSMENT YEAR UNDER CONSIDERAT ION THERE WERE ONLY TWO TRANSACTIONS WHICH LANDS WERE PURCHASED ON 05.07.19 90 AND 13.05.2003 CLEARLY PROVING THE PREDOMINANT INTENTION OF ACQUIRING AND HOLDING THE AGRICULTURAL LANDS AS INVESTMENTS. THE ABOVE GROUNDS OF APPEAL MAY KINDLY BE ALLOWED T O BE ALTERED, AMENDED, AND MODIFIED, ETC IN THE INTEREST OF NATURAL JUSTICE. 3. THE RELEVANT FACTS, IN SHORT, ARE THAT THE ASSES SEE IS AN ADVOCATE BY PROFESSION. DURING THE YEAR UNDER CONSIDERATION, T HE ASSESSEE HAS SHOWN PROFESSIONAL RECEIPTS OF RS.5,77,280/- ON WHICH NET PROFITS HAVE BEEN SHOWN AT RS.1,89,522/-. THE CASE OF THE ASSESSEE WAS SELECT ED FOR SCRUTINY ASSESSMENT AS PER ANNUAL INFORMATION REPORT (AIR) RECEIVED BY THE INCOME TAX DEPARTMENT. THE ASSESSEE WAS FOUND TO HAVE SOLD IMMOVABLE PROPE RTY (LAND) ON WHICH GAINS ARISING THEREFROM WERE NOT OFFERED FOR TAXATI ON. THE ASSESSEE CLAIMED THE GAINS ARISING FROM SALE OF LANDS AS EXEMPT FROM TAX TAKING SHELTER OF SECTION 2(14) R.W.S. 45 OF THE ACT. FROM THE PURCHASE AND SALE DEEDS FILED BY THE ASSESSEE, IT WAS NOTICED BY THE ASSESSING OFFICER T HAT AGRICULTURAL LAND SITUATED AT ANNAPUR VILLAGE, TAL. SHIRUR, DIST. PUNE WERE PU RCHASED BY THE ASSESSEE FOR A CONSIDERATION OF RS.93,36,000/-. SIMILAR ADJACEN T AGRICULTURAL LAND BEARING DIFFERENT GAT NUMBERS WERE SIMULTANEOUSLY PURCHASED BY WIFE OF THE ASSESSEE FOR A CONSIDERATION OF RS.46,64,000/-. THE PROPERT IES WERE BOUGHT BY THE ASSESSEE AND HIS WIFE ON 17.10.2008. THE AFORESAID LAND ALTOGETHER INCLUDING LAND OWNED BY WIFE OF THE ASSESSEE (INVOLVING NEARL Y 45 ACRES 28 GUNTHAS) WERE SOLD FOR A TOTAL CONSIDERATION OF RS.2,00,00,0 00/- ON 28.11.2008. THE PROPERTY WERE SOLD TO SHRI SHRIPRAKASH RAMGOPAL POR WAL AND SHRI VIJAYPRAKASH RAMGOPAL PORWAL. THE PROPERTY WERE PU RCHASED FOR AND ON BEHALF OF THE COMPANY NAMELY CHARTERED REALTORS PVT . LTD. THROUGH ITS DIRECTORS AFOREMENTIONED. IT WAS NOTICED BY THE AS SESSING OFFICER FROM THE SALE DEED THAT OUT OF TOTAL CONSIDERATION OF RS.2,0 0,00,000/-, THE PURCHASERS 3 ITA NO.1960/PN/2014 (PORWALS) HAD ADVANCED RS.1,00,00,000/- THROUGH DEM AND DRAFT ON 13.08.2008 I.E. TWO MONTHS BEFORE THE ASSESSEE VENTURED TO PUR CHASE THE PROPERTIES ON 17.10.2008. THE ASSESSEE TOOK A STAND THAT THESE L ANDS SOLD WERE AGRICULTURAL LAND AND SITUATED BEYOND 8 KILOMETERS OF THE MUNICI PAL LIMITS/CANTONMENT AREA ETC. AND THEREFORE, NOT BEING A CAPITAL ASSET IS EXEMPT FROM CAPITAL GAINS. THE ASSESSING OFFICER, HOWEVER, DISCREDITED THE CLAIM O F THE ASSESSEE FOR EXEMPTION OF THE ALLEGED CAPITAL GAINS. THE ASSESS ING OFFICER OBSERVED THAT THESE PARCELS OF LANDS ACQUIRED BY THE ASSESSEE WER E NOT WITH ANY INTENTION TO HOLD IT FOR CAPITAL ACCRETION, ENJOYMENT AND OWN US E BUT WERE PURCHASED WITH THE SOLE MOTIVE OF EARNING HUGE PROFITS ON IMMEDIAT E SALE THEREOF AS A TRADING ASSET. AS PER ASSESSING OFFICER, SINCE THE LANDS W ERE NOT PURCHASED WITH THE INTENTION OF HOLDING IT BUT HELD AS BUSINESS ASSET ONLY WITH SOLE INTENTION OF EARNING PROFITS FROM SALE THEREOF, THE PROVISIONS O F SECTION 2(14) OF THE ACT WILL NOT COME INTO PLAY. THE ASSESSING OFFICER OBSERVED THAT SINCE THE LAND SO ACQUIRED WAS NOT A CAPITAL ASSET AT THE FIRST PLACE , THERE IS NO MERIT IN THE CONTENTION OF THE ASSESSEE THAT SAID PARCEL OF AGRI CULTURAL LAND WERE TO BE EXCLUDED FROM THE DEFINITION OF THE CAPITAL ASSET A ND CONSEQUENTLY INCOME FROM SALE THEREOF WAS NOT LIABLE TO BE TAXED. THE ASSES SING OFFICER SIMULTANEOUSLY WITH REFERENCE TO THE REVENUE RECORDS (7/12 EXTRACT S) OBSERVED THAT THE MAJOR PORTION OF THESE AGRICULTURAL LANDS WERE PAD (NOT USEFUL FOR CULTIVATION) AND IN THE REMAINING PORTION OF LAND, THE CULTIVATION OF C ROP WAS JOWAR. THE ASSESSING OFFICER NEXT OBSERVED THAT ASSESSEE IS MA INLY ENGAGED IN LEGAL PROFESSION AS A LAWYER AND HIS OCCUPATION IS NOT PR IMARILY AS AN AGRICULTURIST. THE ASSESSING OFFICER THEREAFTER OBSERVED THAT THE AFORESAID LAND HAS BEEN ACQUIRED OUT OF BORROWED FUNDS. THE ASSESSING OFFI CER WENT ON TO OBSERVE THAT ASSESSEE HAS SHOWN A MEAGER INCOME OF RS.1,01, 845/- DERIVED FROM EXISTING AGRICULTURAL LAND HELD BY HIM WHICH IS TOO LOW COMPARED TO THE LAND HOLDINGS OF THE ASSESSEE. ON THE TOTALITY OF THESE FACTS, THE ASSESSING OFFICER CONCLUDED THAT ENTIRE ACTIVITY OF PURCHASE AND IMME DIATE SALE OF LAND BY THE ASSESSEE FALLS WITHIN THE DOMAIN OF ADVENTURE IN N ATURE OF TRADE. HE ACCORDINGLY TREATED THE PROPORTIONATE PROFIT OF RS. 35,86,980/- RELATABLE TO ASSESSEE (IN EXCLUSION TO SHARE OF PROFITS OF WIFE) ARISING ON SALE OF LAND AS 4 ITA NO.1960/PN/2014 BUSINESS INCOME UNDER SECTION 28(I) R.W.S. 2(13) OF THE ACT. FOR SUCH ACTION, HE ALSO RELIED UPON THE DECISION OF THE HONBLE BOM BAY HIGH COURT IN THE CASE OF DCIT VS. GOPAL RAMNARAYAN KASAT REPORTED IN 328 ITR 556 (BOM.). 3.1 AGGRIEVED BY THE AFORESAID ACTION OF THE ASSESS ING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTH ORITY I.E. THE CIT(A). 4. THE CIT(A) REVISITED THE ENTIRE ISSUE BUT DECLIN ED TO INTERFERE WITH THE ORDER OF THE ASSESSING OFFICER. SHE TOOK A VIEW BY WAY OF AN ELABORATE ORDER THAT THE INTENTION OF THE ASSESSEE WAS NEVER TO PUR CHASE THE AFORESAID LANDS WITH A VIEW TO CULTIVATE THE SAME. HENCE, SHE CONF IRMED THE ACTION OF THE ASSESSING OFFICER IN HOLDING THAT ACTIVITIES CARRIE D OUT BY THE ASSESSEE TOWARDS PURCHASE AND SALE OF IMPUGNED LAND AS ADVENTURE IN NATURE OF TRADE AND THUS A BUSINESS ACTIVITY CHARGEABLE TO TAX. 4.1 AGGRIEVED FURTHER BY THE ORDER OF THE CIT(A), T HE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 5. THE LD. AUTHORIZED REPRESENTATIVE (AR) FOR THE A SSESSEE SHRI S. N. DOSHI CONTENDED THAT THE ASSESSEE HAD PURCHASED THE IMPUGNED AGRICULTURAL LAND IN QUESTION PRIMARILY FOR THE PURPOSES OF CULT IVATION. HE SOUGHT TO ARGUE THAT SOME PART OF THE LAND WAS POSSIBLY PAD BUT T HAT DOES NOT NECESSARILY MEAN THAT THE LAND COULD NOT BE USED FOR THE PURPOS ES OF CULTIVATION SUCH AS CULTIVATION OF TREES. THE LD. AR FOR THE ASSESSEE VOCIFEROUSLY CONTENDED THAT THE LAND WAS NOT PURCHASED WITH THE INTENTION OF SE LLING IT IMMEDIATELY FOR PROFITS ALTHOUGH THE CIRCUMSTANCES LED TO SUCH EVEN TUALITY. IT WAS EXPLAINED THAT THE DIRECTORS, SHRI SHRIPRAKASH RAMGOPAL PORWA L AND SHRI VIJAYPRAKASH RAMGOPAL PORWAL WERE GOOD FRIENDS OF THE ASSESSEE A ND AT THE REQUEST OF THE ASSESSEE, THEY ADVANCED HIM RS.1,00,00,000/- FROM T HEIR COMPANY IN WHICH THEY WERE DIRECTORS TO ENABLE THE ASSESSEE TO PURCH ASE THE IMPUGNED AGRICULTURAL LAND. IT WAS FURTHER EXPLAINED THAT W ITH THIS LOAN AMOUNT, THE ASSESSEE PURCHASED THE LAND AND WAS INTENDING TO PU T IT TO THE AGRICULTURAL USE, 5 ITA NO.1960/PN/2014 SIMILAR TO OTHER LANDS HELD BY HIM FOR AGRICULTURAL PURPOSES. IT WAS STATED THAT THE TWO PORWAL BROTHERS, HOWEVER, ASKED THE ASSESSE E TO RETURN THEIR LOAN AND SINCE IT WAS IMMEDIATELY NOT POSSIBLE, THE ASSESSEE FIRST ATTEMPTED TO SELL OTHER EXISTING PARCEL OF LANDS, WITHOUT ANY AVAIL NONETHE LESS. THEREFORE, IT WAS PROPOSED TO SELL THE IMPUGNED LAND PURCHASED BY HIM ON 17.10.2008 TO PORWAL BROTHERS FOR WHICH THE PORWAL BROTHERS AGREED. THE LD. AR ASSERTED THAT IT WAS IN THESE CHANGED CIRCUMSTANCES THAT THE LAND HAD TO BE RELUCTANTLY SOLD ON 26.11.2008 BUT INSISTED THAT THERE WAS NO INTENTION TO EARN PROFITS BY ITS SALE AT THE TIME OF ITS PURCHASE AND THEREFORE THE TRANSACT IONS CANNOT BE TREATED AS AN ADVENTURE IN THE NATURE OF TRADE AS WRONGLY HELD BY THE REVENUE AUTHORITIES. 5.1 APART FROM THE AFORESAID ARGUMENT, THE LD. AR A LSO CONTENDED THAT THE LAND IN QUESTION CANNOT BE TREATED AS A CAPITAL AS SET BEING AGRICULTURAL LAND LOCATED MORE THAN 8 KILOMETERS AWAY FROM SHIRUR MUN ICIPALITY, WHICH IS NEAREST MUNICIPALITY TO THE LAND IN QUESTION NOR IS THE LAND LOCATED AT ANY CANTONMENT OR SUCH SIMILAR BODIES. 5.2 THUS, FIRSTLY, THE IMPUGNED LAND SO PURCHASED I S A CAPITAL TRANSACTION AND PROFIT ARISING THEREFROM ON SALE IS IN THE NATURE O F CAPITAL GAINS AND SECONDLY, THE LAND IN THIS CASE IS AN AGRICULTURAL LAND WHICH IS CULTIVABLE AND SITUATED OUTSIDE THE JURISDICTION OF A MUNICIPALITY IN TERMS OF SECTION 2(14)(III) AND IS THUS NOT CAPITAL ASSET LIABLE FOR ANY TAXATION. THE LD. AR ACCORDINGLY PLEADED THAT ON A HOLISTIC CONSIDERATION OF THE ABO VE FACTUAL POSITION, THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.35,86, 980/- REQUIRES TO BE DELETED. 5.3 THE LD. AR VEHEMENTLY ASSAILED THE FINDINGS OF THE CIT(A) AND ALLEGED THAT THE CIT(A) HAS PROCEEDED ON FACTUALLY WRONG PR EMISE AT DIFFERENT PLACES WHILE COMING TO A WRONGFUL CONCLUSION AND HAS ALSO FAILED TO TAKE VITAL FACTS INTO CONSIDERATION. TO LEND SUPPORT TO SUCH ALLEGA TIONS, THE LD. AR POINTED OUT WITH REFERENCE TO PARA 4 OF THE ORDER OF CIT(A) THA T THE MAJOR PORTION OF LAND ARE CLASSIFIED AS PAD WHICH IS FACTUALLY NOT CORR ECT. HE ADVERTED OUR ATTENTION 6 ITA NO.1960/PN/2014 TO THE REVENUE RECORDS TO SHOW THAT WHILE A PART OF THE LAND WAS PAD WHICH IS NATURAL IN SUCH LARGE TRACT OF LAND PURCHASED, ONE CANNOT DENY THAT THE LAND WAS CULTIVABLE AND CROP JOWAR WAS CULTIVATED AND PROD UCED IN SUBSTANTIAL PART OF THE IMPUGNED LAND. THE LD. AR WITH REFERENCE TO PA RA 4.1 OF THE CIT(A) ORDER SUBMITTED THAT ANOTHER OBSERVATION OF THE CIT(A) TH AT THE ASSESSEE WAS NOT ENGAGED IN ACTUAL AGRICULTURAL ACTIVITY AND THUS NO T AN AGRICULTURIST IS AGAIN CONTRARY TO THE MATERIAL ON RECORD. HE SUBMITTED T HAT ADMITTEDLY A SUM OF RS.1,01,845/- WAS DECLARED IN THE RETURN OF INCOME UNDER ASSESSMENT TOWARDS THE AGRICULTURAL INCOME. WITH REFERENCE TO PARA 4. 1.2 OF THE CIT(A) ORDER, THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE CIT(A) HAS WRONGLY OBSERVED THAT A PERMISSION FOR A NON-AGRICULTURAL USE OF LAND HAS BEEN OBTAINED. HE STRESSED THAT NO SUCH PERMISSION HAS BEEN OBTAINED. HE NEXT SUBMITTED THAT NO ACTIVITY OF DEVELOPMENT WAS CARRIED OUT ON THE LAND IN QUEST ION. HE THEREAFTER CONTROVERTED ANOTHER OBSERVATIONS OF THE CIT(A) THA T THE ASSESSEE HAS NEVER USED ANY LAND FOR AGRICULTURAL PURPOSES. THE LD. A R SUBMITTED THAT IN THE CONTEXT OF THE FACT THAT LAND WAS BARELY HELD FOR A PERIOD OF ONE MONTH OR SO, SUCH ADVERSE INFERENCE FOR NOT PUTTING THE LAND FOR AGRICULTURAL USE IS UNWARRANTED. HE EXTENDED HIS SUBMISSION THAT THERE IS NO BASIS FOR SUCH AN OBSERVATION THAT THE LAND HELD BY THE ASSESSEE WERE NOT PUT TO AGRICULTURAL OPERATIONS. HE THEREAFTER CONTENDED THAT THE IMPUG NED LAND SOLD WAS RURAL AGRICULTURAL LAND AND NOT AN URBAN AGRICULTURAL LAN D AS WRONGLY OBSERVED BY THE CIT(A). HE NEXT SUBMITTED THAT THE CIT(A) PROCEEDE D ON YET ANOTHER INCORRECT ASSUMPTION OF FACT THAT THE LAND HAS ALREADY BEEN P LOTTED AND ROADS AND OTHERS FACILITIES ARE PROVIDED. 5.4 HE, THUS, IN NUTSHELL SUBMITTED THAT THE ORDER OF THE CIT(A) IS MARRED WITH GRAVE FACTUAL ERRORS AND THEREFORE DESERVES TO BE SET-ASIDE AND REVERSED. THE LD. AR ALSO RELIED ON CERTAIN JUDICIAL PRECEDEN TS TO PROP UP HIS CASE WHICH WE SHALL DEAL WITH AT APPROPRIATE PLACE. 6. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE, ON THE OTHER HAND, REFERRED TO AND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND 7 ITA NO.1960/PN/2014 CONTENDED THAT IT IS A GLARING CASE FOR CHARGEABILI TY OF INCOME TO TAX IN THE FACTS OF THE CASE. THE LD. DR NOTED THAT THE PROFITS ON SALE OF LAND IN QUESTION BY THE ASSESSEE ALONG WITH HIS WIFE IS APPARENTLY A BU SINESS ACTIVITY AND THUS LIABLE TO BE TAXED UNDER HEAD BUSINESS INCOME. T HE LD. DR THUS CONTENDED THAT NO INTERFERENCE WITH THE ORDER OF THE CIT(A) I S CALLED FOR. 7. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI ALS ON RECORD AS WELL AS THE ORDERS OF THE REVENUE AUTHORITIES. WE HAVE ALSO APPLIED OUR MIND TO THE DECISIONS PLACED BEFORE US. THE ASSESSEE ACQUIRED C ERTAIN PARCEL OF LAND AT ANNAPUR VILLEGE, TAL. SHIRPUR, DIST. PUNE AND THERE AFTER RE-SOLD WITHIN A VERY SHORT SPAN OF ABOVE ONE AND HALF MONTHS OR SO. THE TRANSACTION OF IMPUGNED PURCHASE AND SALE HAS GIVEN RISE TO PROFITS OF RS. 35,86,980/- WHICH WAS BROUGHT TO TAX BY THE REVENUE AS AN ADVENTURE IN T HE NATURE OF TRADE UNDER SECTION 28 R.W.S 2(13) OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS DISPUTED THE AFORESAID ACTION OF THE REVENUE BEFORE US ON VA RIOUS COUNTS. FIRSTLY, IT IS THE CASE OF THE ASSESSEE THAT THE PURCHASE AND SALE TRA NSACTION OF IMPUGNED LAND IS A TRANSACTION OF CAPITAL NATURE AND CONSEQUENTLY, G AIN ARISING THEREFROM IS CHARGEABLE UNDER S. 45 UNDER THE HEAD CAPITAL GAIN S IN CONTRAST TO STAND OF THE REVENUE SEEKING TO TREAT THE LAND SO ACQUIRED AS A TRADING ASSET AND THUS TAXING RESULTANT PROFITS ON ITS SALE AS BUSINESS I NCOME UNDER S. 28 OF THE ACT. SECONDLY, IT IS THE CASE OF THE ASSESSEE THAT THE I MPUGNED LAND IS AN AGRICULTURAL LAND. THIRDLY, THE IMPUGNED AGRICULTUR AL LAND IS SITUATED IN RURAL AREA OUTSIDE THE JURISDICTION OF MUNICIPALITY OR CA NTONMENT BOARD ETC. IS THUS OUTSIDE THE PURVIEW OF DEFINITION OF CAPITAL ASSET DEFINED UNDER S 2(14) OF THE ACT IN VIEW OF THE EXCLUSIONS PROVIDED IN SUB-CLAUS E (III) THEREIN. FOURTHLY, THERE BEING NO TRANSFER OF CAPITAL ASSET PER SE IN VIEW OF THE EXCLUSIONS FOR RURAL AGRICULTURAL LAND AS NOTED ABOVE, GAIN ARISIN G THEREFROM IS NOT TAXABLE UNDER S. 45 AT ALL. IN ESSENCE, THE ASSESSEE CLAIMS THAT THE GAIN ARISING ON SALE OF AGRICULTURAL PROPERTY NOT BEING A CAPITAL ASSET IS NOT SUBJECT TO TAX AT ALL IN VIEW OF THE MANDATE OF LAW IN THIS REGARD. 8 ITA NO.1960/PN/2014 7.1 UNDER SECTION 45 OF THE ACT, THERE CANNOT BE AN Y LEVY OF CAPITAL GAINS UNLESS THE ASSET TRANSFERRED IS A CAPITAL ASSET A S DEFINED UNDER S. 2(14) OF THE ACT. IT IS THE CASE OF THE ASSESSEE THAT THE TRANSA CTION IS CAPITAL IN NATURE AND THE IMPUGNED LAND NOT BEING A CAPITAL ASSET, THE GAIN ARISING ON SALE OF PROPERTY NOT BEING A CAPITAL ASSET IS NOT CHARGEABLE TO TAX ALL. THE REVENUE ON THE OTHER HAND DISPUTES CAPITAL NATURE OF TRANSACTION AS CLAI MED BY THE ASSESSEE. IT IS THE CASE OF THE REVENUE THAT THE SEQUENCE OF EVENTS IN THE IMPUGNED TRANSACTION LENDS CREDENCE TO THE IMPRESSION OF AN ADVENTURE IN THE NATURE OF TRADE REFERRED TO IN S. 2(13) OF THE ACT AND THEREFORE IT IS IN TH E AKIN TO BUSINESS GIVING RISE TO ITS TAXABILITY UNDER S. 28 OF THE ACT. 7.2 THE QUESTION OF DETERMINATION OF OTHER ISSUES N AMELY WHETHER THE LAND IS AGRICULTURAL LAND AND IF SO WHETHER THE IMPUGNED LA ND IS OUTSIDE THE DEFINITION OF CAPITAL ASSET TO CLAIM EXEMPTION FROM APPLICAB ILITY OF S. 45 WILL ARISE ONLY IF THE IMPUGNED TRANSACTION DO NOT BEAR THE TRAPPIN GS OF ADVENTURE IN THE NATURE OF TRADE OR COMMERCE ETC. THUS, IN THE CONTEXT OF C ASE IN HAND, FIRST AND FOREMOST CONTROVERSY THAT CALLS FOR OUR ADJUDICATIO N IS WHETHER THE IMPUGNED TRANSACTION IS A BUSINESS TRANSACTION OR A CAPITAL TRANSACTION. 7.3 IN THIS CONTEXT, WE NOTE THAT THERE IS A QUALIT ATIVE DIFFERENCE BETWEEN PROFITS ARISING FROM SALE OF CAPITAL ASSETS AND THA T OF TRADING ASSETS UNDER THE ACT. SECTION 2(13) DEFINING BUSINESS AND S. 2(14) DEFINING CAPITAL ASSETS OPERATES IN MUTUAL EXCLUSION. TO PUT IT DIFFERENTL Y, CAPITAL ASSETS AND TRADING ASSETS OR STOCK IN TRADE ARE TREATED DIFFERENTLY UN DER THE SCHEME OF THE ACT. THEY CAN NOT BE COMPARED ON PAR WITH EACH OTHER AS A SIMILAR CLASS OF ASSETS. SECTION 2(13) OF THE ACT DEFINES THE EXPRESSION BU SINESS IN AN INCLUSIVE MANNER AND FURTHER EMBRACES ANY ADVENTURE IN THE NA TURE OF TRADE OR COMMERCE ETC. WITHIN ITS SWEEP. SEC. 2(13) READS AS UNDER: 'BUSINESS' INCLUDES ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTUR E OR CONCERN IN THE NATURE OF TRADE, COMMERCE OR MANUFAC TURE.' [ UNDERLINE IS OURS ] 9 ITA NO.1960/PN/2014 7.4 BEFORE WE PROCEED TO DEAL WITH THE OBJECTIVE FA CTS OF THE PRESENT CASE IN APPEAL, IT WOULD BE PERTINENT TO REFER TO THE DECIS ION OF HONBLE BOMBAY HIGH COURT IN THE DCIT VS. GOPAL RAMNARAYAN KASAT (BOM) 328 ITR 556 RELIED UPON BY THE AO WHERE NUANCED UNDERSTANDING OF EXPRE SSION ADVENTURE IN THE NATURE OF TRADE HAS BEEN PROVIDED AS UNDER: 20. IN THIS BACKGROUND, LET US EXAMINE THE OBSERVATION S OF THE TRIBUNAL WHILE AFFIRMING THE FINDINGS OF THE AO AND THE CIT(A), TH AT THE TRANSACTIONS, WHICH ARE SUBJECT-MATTER OF THE PROCEEDINGS, AMOUNTED TO 'ADV ENTURE IN THE NATURE OF TRADE'. THE TRIBUNAL HAS FOUND THUS : '21. WE HAVE ALSO EXAMINED THE MEANING OF THE TERM 'ADVENTURE IN THE NATURE OF TRADE' MENTIONED IN S. 2(13) OF THE ACT. IT HAS NO WHERE BEEN DEFINED IN THE IT ACT. AS FAR AS THE DICTIONARY MEANING OF THE WOR D 'ADVENTURE' IS CONCERNED, IT IMPLIES A PECUNIARY RISK, A VENTURE, A COMMERCIAL E NTERPRISE. THE WORK 'VENTURE' IN ITS TURN IS DEFINED AS A COMMERCIAL ACTIVITY IN WHICH THERE IS A RISK OF LOSS AS WELL AS A CHANCE OF GAIN. DURING THE COURSE OF HEAR ING BEFORE US, THIS QUESTION HAS ALSO BEEN CROPPED UP WHETHER THE IMPUGNED ACTIV ITY HAD FALLEN UNDER THE TERMINOLOGY 'TRADE'. A 'TRADE' IN THE CONTEXT OF TH E DEFINITION OF THE EXPRESSION 'BUSINESS' IS A WIDER CONCEPT AND ONCE THIS TERM IS ASSOCIATED WITH THE TERM 'ADVENTURE' THE SCOPE HAS FURTHER ENLARGED. THE ADV ENTURE IN THE NATURE OF TRADE IS ALLOWED TO TRANSACTION THAT CONSTITUTES A TRADE OR BUSINESS BUT MAY NOT BE A BUSINESS ITSELF. WE ARE SAYING SO BECAUSE THE BUSIN ESS HAS CHARACTERIZED BY SOME OF THE ESSENTIAL VENTURES SUCH AS RESPECTIVE T RANSACTIONS, HOLDING OF STOCK- IN-TRADE, DEALING WITH THE CUSTOMERS AND IMPLIED IN TENTION BETWEEN THE PARTIES ETC. BUT, CONTRARY TO THIS EVEN AN ISOLATED TRANSAC TION CAN SATISFY THE DESCRIPTION OF AN ADVENTURE IN THE NATURE OF TRADE. FOR AN ADVE NTURE, IT IS NOT NECESSARY THAT THERE SHOULD BE A SERIES OF TRANSACTIONS I.E. BOTH OF PURCHASE AND OF SALES. TO OUR HUMBLE UNDERSTANDING BASED UPON THE ABOVE DISCU SSION, A SINGLE TRANSACTION OF PURCHASE AND SALE MAY BE OUTSIDE THE ASSESSEE'S LINE OF BUSINESS, CAN CONSTITUTE AN ADVENTURE IN THE NATURE OF TRADE. THE REFORE, NEITHER RESPECTIVE NOR CONTINUITY OF SIMILAR TRANSACTION IS NECESSARY TO C ONSTITUTE A TRANSACTION AS AN ADVENTURE IN THE NATURE OF TRADE. ONCE THERE IS A C ONTINUITY OF TRANSACTION THEN IT IS NOTHING BUT CARRYING ON A BUSINESS AND IN SUCH S ITUATION, THE QUESTION OF ADVENTURE IN THE NATURE OF TRADE CAN HARDLY ARISE. TO SUPPLEMENT AS ALSO TO FURTHER ELABORATE THIS DISCUSSION, IT CAN BE ADDED THAT THE WORD 'ADVENTURE' MAY BE IN THE REALMS OF TRAVEL, VOYAGE, HUNTING, ETC. B UT IT IS ATTACHED WITH OTHER WORDS I.E. ADVENTURE IN THE NATURE OF TRADE, THEN T HE MOTIVE OF ADVENTURE IS ATTACHED WITH THE MOTIVE OF TRADE. IN THE FACE OF I TS OWN EVIDENCE A CASE HAS TO BE DECIDED BUT THE MOTIVE CAN NEVER BE IRRELEVANT T O BE INFERRED BY SURROUNDING CIRCUMSTANCES AND THE INTENTION BEHIND THE SAID ACT IVITY. THE MOTIVE OF THE SELLER, HIS INTENTION BEHIND SALE, HIS OVERALL ACTI VITY OF ACCOMPLISH, THE DESIRED GOAL ARE ALL IN CONJUNCTION WITH THE CONDUCT OF THE ASSESSEE SO AS TO ESTABLISH THAT THE ADVENTURE AS TAKEN BY HIM WAS WITHIN THE S PHERE OF TRADE ACTIVITY. THOUGH THESE FACTS CAN ALSO NOT BE RULED OUT THAT N OT ONE OF THE CONSIDERATION MENTIONED IN THE FOREGOING PARAS BY ITSELF REALLY I S A CONCLUSIVE CRITERIA, HENCE THE DECISION IN EACH CASE MUST REST ON THE TOTALITY OF THE FACTS AND THE COMBINED EFFECT OF ALL THE CIRCUMSTANCES. OUR ENDEAVOR IN DE CIDING THESE APPEALS WAS IN THIS DIRECTION ONLY. THUS, AMONG OTHERS, THE SCOPE OF EXPRESSION BUSINE SS STOOD WIDENED BY THE EXPRESSION ANY ADVENTURE AKIN TO TRADE OR COMMERCE ETC. AN ADVENTURE IN THE 10 ITA NO.1960/PN/2014 NATURE OF TRADE NEED NOT BE BUSINESS ITSELF. ANY AC TIVITY AKIN TO BUSINESS MAY ALSO BE TAKEN TO BE AN ADVENTURE IN THE NATURE OF T RADE. 7.5 THE CLAIM OF THE ASSESSEE IS THAT THE INTENTION AT THE TIME OF PURCHASE OF LAND WAS TO HOLD IT FOR HIS ENJOYMENT AND TO EARN R EGULAR YIELD THEREON AND THUS IS A CAPITAL TRANSACTION. NEEDLESS TO SAY, THESE IN TENTIONS ARE INCAPABLE OF ANY PROOF. THESE CAN ONLY BE INFERRED ON THE BASIS OF F ACTS AND CIRCUMSTANCES OF EACH CASE. WE FIND THE FACTS OF THE CASE AS NARRATE D ABOVE TO BE QUITE PECULIAR. AS NOTED, THE ASSESSEE HAS PURCHASED LARGE TRACTS O F LAND FOR A SUBSTANTIAL CONSIDERATION OF RS.93,36,000/-. SIMULTANEOUSLY, TH E WIFE OF THE ASSESSEE HAS ALSO PURCHASED SOME PARCELS OF ADJACENT LAND FOR A CONSIDERATION OF RS.46,64,000/- ON 17.10.2008. THE COMBINED LAND AR EA IS STATED TO BE NEARLY 18 HECTARES AND 45 R EQUIVALENT TO 45 ACRES AND 28 GUNTHAS. THE AFORESAID LAND WERE SOLD ALTOGETHER BY THE ASSESSEE JOINTLY WITH H IS WIFE FOR A COMBINED CONSIDERATION OF RS.2,00,00,000. THE SHARE OF PROFI T OF THE ASSESSEE IS STATED TO BE RS.35,86,980/- ON ACCOUNT OF TRANSACTION OF SUCH PURCHASE AND SALE. IMMEDIATELY AFTER THE IMPUGNED PURCHASE, A SALE DEE D WAS EXECUTED ON 26.11.2008 BETWEEN PORWALS AND THE ASSESSEE AND HIS WIFE JOINTLY. THE LAND IS CLAIMED TO BE AN AGRICULTURAL LAND BY THE ASSESSEE. PERTINENTLY, THE BUYER (PORWALS) HAD EARLIER ADVANCED A SUM RS.1,00,00,000 /- TO THE ASSESSEE THROUGH DEMAND DRAFT (DD) DATED 13.08.2008 I.E. TWO MONTHS BEFORE ASSESSEE HAD PURCHASED THE PROPERTY I.E. ON 17.10.2008. EVIDENTL Y, ASSESSEE DID NOT POSSESS ANY OWN LIQUID FUNDS AT HIS DISPOSAL TO ENABLE HIM TO ACQUIRE THE IMPUGNED LAND. THE ENTIRE PURCHASE COST IS FUNDED BY THE POR WALS. THUS, APPARENTLY, THE ENTIRE MONEY TOWARDS PURCHASE OF LAND HAS BEEN FINA NCED BY THE PERSONS TO WHOM THE LAND WAS ULTIMATELY SOLD IN A VERY SHORT S PAN OF TIME. THE PURCHASE AND SUBSEQUENT SALE OF THE LAND HAS QUICKLY HAPPENE D WITHIN A MARGINAL TIME GAP OF ABOUT 1 (ONE AND HALF) MONTHS. WE ARE ALI VE TO THE CONTENTION ON BEHALF OF THE ASSESSEE THAT ASSESSEE INTENDED TO SA LE OTHER AGRICULTURAL LAND IN HIS POSSESSION TO RETURN THE MONEY BORROWED FROM PO RWALS WHICH DID NOT FRUCTIFY. FOR THIS PURPOSE, SOME MEMORANDUM AGREEME NT WAS REFERRED TO BY WAY OF AN ADDITIONAL EVIDENCE. HOWEVER, THERE IS N OTHING ON RECORD TO SHOW 11 ITA NO.1960/PN/2014 JUSTIFY THE CIRCUMSTANCES WHICH PREVENTED THE ASSES SEE TO PRODUCE THE IMPUGNED AGREEMENT BEFORE REVENUE AUTHORITIES. NO P ERCEPTIBLE REASONS HAVE BEEN ASSIGNED. NOTWITHSTANDING, WE WERE INFORMED AT THE BAR THAT PURPORTED AGREEMENT FOR SALE OF OTHER AGRICULTURAL LAND WAS N OT ACTED UPON AT ALL. NO ADVANCE WAS RECEIVED AGAINST SUCH PURPORTED AGREEME NT EITHER. THE ENTIRE EXPLANATION FOR INITIAL INTENTION TO RETURN BORROWE D MONEY WHICH FAILED IS THUS BALD AND UNVERIFIABLE. IT ALSO DOES NOT COINCIDE W ITH A NORMAL BEHAVIOR OF A PERSON OF ORDINARY PRUDENCE. THE ENTIRE EXPLANATIO N BASED ON A DUMB DOCUMENT NOT ACTED UPON, THUS, HAS NO RATIONAL PROB ATIVE VALUE OF THE PURPORTED INTENTION TO RETURN FRIENDLY BORROWALS. WHETHER THE VALUE OF EXISTING LAND RECORDED IN THE PURPORTED AGREEMENT WAS CAPABLE OF MATCHING THE BORROWALS IS ALSO NOT AVAILABLE ON RECORD. THE RELEVANT FINANCIA L DATA PROVING THE FINANCIAL CAPACITY OF THE ASSESSEE IS NOT AVAILABLE TO JUSTIF Y THE STAND. MERE AVERMENTS OF GENERIC NATURE BASED ON SOME DOCUMENTS WHICH WERE N EITHER VERIFIED BY THE REVENUE NOR ACTED UPON IN ANY MANNER CANNOT IN OUR VIEW BE TAKEN AS SOURCE OF EXPLANATION FOR TRANSACTION OF SUCH MAGNITUDE. THE ASSESSEE HAS MADE OUT A CASE THAT OWNING TO THE PRESSURE FROM THE PORWALS B ROTHERS TO RETURN THEIR LOAN AMOUNT WHICH WAS NOT IMMEDIATELY POSSIBLE DUE TO FI NANCIAL CONSTRAINTS, IT WAS RELUCTANTLY PROPOSED TO SELL THE IMPUGNED LAND SO P URCHASED BY THE ASSESSEE. IT WAS THUS MADE OUT THAT THE COMPELLING CIRCUMSTANCES PROPELLED THE ASSESSEE TO ENTER INTO SUCH UNINTENDED RESALE. IT WAS THUS INSI STED THAT THERE WAS NO INTENTION TO EARN IMMEDIATE PROFITS BY ITS SALE. TH E LAND WAS THUS CLAIMED TO BE PURCHASED WITH A VIEW TO HOLD IT FOR EXPLOITATION I N AGRICULTURE AND FOR ITS CAPITAL APPRECIATION AND THEREFORE THE TRANSACTIONS CANNOT BE REGARDED AS AN ADVENTURE IN THE NATURE OF TRADE AS HELD BY THE A SSESSING OFFICER. WE FIND SUCH EXPLANATION TO BE SHALLOW AND SUPERFICIAL. THE RETURN OF INCOME FILED BY THE ASSESSEE SHOWS THAT THE SOURCE OF REGULAR INCOM E IS NOT COMMENSURATE WITH THE MAGNITUDE OF THE LAND TRANSACTION. A PERSON INT ENDING TO HOLD A LAND OF THIS VALUE FOR ITS OWN EXPLOITATION AND ENJOYMENT AND NO T INVESTING ANY MONEY OF HIS OWN ARE QUITE CONTRADICTORY CONDUCT. THE ASSESS EE SEEKS TO EXPLAIN THAT HE WAS WHOLLY DEPENDENT OF SALE OF EXISTING AGRICULTUR AL LAND TO SUBSTITUTE THE MONEY FINANCED BY THE LENDER BY HIS OWN IS WITHOUT ANY TANGIBLE EVIDENCE 12 ITA NO.1960/PN/2014 SHOWCASING THE AFORESAID INTENTION. ON THE OTHER HA ND, HERE IS A FINANCIER WHO HAS GIVEN MONEY OF FORMIDABLE AMOUNT PURPORTEDLY ON A FRIENDLY CONSIDERATION WITHOUT ANY CORRESPONDING COMMERCIAL BENEFIT AND TH EN SUDDENLY TURNS HEAT FOR RETURN OF MONEY AND THEREAFTER CONVENIENTLY AGR EES TO ACQUIRE THE SAME LAND WITHOUT ANY DEMUR WHICH WAS PURCHASED FROM THE AFORESAID MONEY AND THAT TOO AT A VERY LARGE DIFFERENTIALS IN SUCH A VE RY SHORT SPAN. THESE FACTS WHEN COMBINED TOGETHER GIVES A COMMON THREAD TO BELIEF T HAT ENTIRE TRANSACTION WAS SYSTEMATIC AND PRE ORDAINED ONE, VENTURED INTO WITH A CLEAR TRAPPINGS OF COMMERCIAL SPIRIT WHERE THE ASSESSEE IDENTIFIED THE LAND ON BEHALF OF THE EXISTING AND KNOWN BUYER AND TRANSFERRED IT TO HIM AS SOON AS THE TITLE OF THE LAND WAS OBTAINED AND IN THE PROCESS, ABNORMAL AND EXORBITANT GAINS WERE EARNED. THE PATTERN OF SEQUENTIAL EVENTS CLEARLY SU GGESTS THAT THE FUND RECEIVED IN ADVANCE FOR SUCH PURCHASE SERVED AS AN ASSURANCE FOR THE TRANSACTION TO SAIL THROUGH. NOTABLY, INITIAL FUNDS OF RS. 1 CRORE WERE PROVIDED TO THE ASSESSEE BY PORWALS BY WAY OF A DEMAND DRAFT UNLIKE CHEQUE TRAN SACTIONS. REASONS FOR FRIENDLY LOAN GIVEN BY WAY OF A DEMAND DRAFT WITHOU T ANY DISCERNIBLE EMERGENCY IS BEST KNOWN TO THE PARTIES INVOLVED. TH E GOVERNING FACTORS IN THE FORM OF PURCHASE FINANCED ENTIRELY BY THE ULTIMATE BUYER AND CONSEQUENT TRANSFER OF LAND TO THE ULTIMATE BUYER ALMOST IMMED IATELY ON ITS ACQUISITION CANNOT BE SIMPLY BRUSHED ASIDE. CLEARLY, THE ASSESS EE WAS INTERESTED IN EXPLOITING COMMERCIAL OPPORTUNITY FOR QUICK GAINS I N A VERY SHORT TIME HORIZON. THE ATTENDANT FACTS ALSO POINTS OUT THAT THE PURCHA SE OF LAND WAS FAR BEYOND THE EARNING CAPACITY OF THE ASSESSEE AND THUS CLAIM OF THE ASSESSEE THAT THE LAND WAS INTENDED FOR PERSONAL USE AND ITS EXPLOITATION AND FOR APPRECIATION WITH EFFLUX OF TIME IS UTTERLY IMPROBABLE AND THUS IS DE VOID OF MERITS. A COMBINED READING OF ALL CONNECTED FACTS WARRANT FOR AN INESC APABLE CONCLUSION THAT THE MOTIVE FOR PURCHASE ITSELF WAS FOR EMBARKING IN AN ADVENTURE IN THE NATURE OF TRADE. 7.6 WE ALSO NOTE THE CONTENTIONS OF THE ASSESSEE TH AT THE ASSESSEE OWNS OTHER TRACT OF AGRICULTURAL LAND APART FROM THE IMPUGNED LAND AND IS HOLDING THESE LANDS WITH A VIEW TO CARRY OUT AGRICULTURAL OPERATI ONS. IT WAS THEREFORE 13 ITA NO.1960/PN/2014 CONTENDED THAT ADVERSE INFERENCE AGAINST THE ASSESS EE IS NOT JUSTIFIED. WE ARE NOT IMPRESSED BY THIS ARGUMENT EITHER. THE MERE PRE SENCE OF OTHER HOLDINGS OF AGRICULTURAL LAND WOULD NOT GRANT ANY INDEFEASIBLE RIGHT TO CLAIM ANY AND EVERY TRANSACTION OF LAND TO BE OF CAPITAL NATURE. SIMILA RLY, SOLITARY TRANSACTION OF SUCH NATURE IS ALSO OF NO BEARING FOR DETERMINATION OF THE NATURE OF TRANSACTION. THE ISSUE FOR DETERMINATION DEPENDS ON TOTALITY OF FACTS OF EACH CASE. AS NOTED, THE IMPUGNED TRANSACTION GIVING RISE TO THE DISPUTE IS BESET WITH UNCHARACTERISTIC FEATURES WHICH ARE AKIN TO ADVENTU RE IN THE NATURE OF TRADE RATHER THAN A CAPITAL TRANSACTION. 7.7 AN INCIDENTAL POINT MAY ARISE THAT THE LAND WAS REGISTERED PRIOR TO ITS SALE AND THUS BE VIEWED A CAPITAL TRANSACTION. WE OBSERVE THAT NOTHING TURNS ON THIS ACT OF THE ASSESSEE EITHER. THE PURCHASE IN A PRE-ORDAINED TRANSACTION COULD BE REGISTERED WITH A MOTIVE TO GAIN PROXIMITY TO AND FOR OVERRIDING CONTROL OVER THE SALE TRANSACTION. THE ENCUMBRANCE IF ANY, THEREON CAN ALSO BE WEIGHED BY THE ULTIMATE BUYER FOR HIS COMFORT IN PU RCHASE. ALSO, BY REGISTRATION PRIOR TO SALE, THE HUGE POTENTIAL OF G AIN CAN BE HARNESSED WITHOUT ANY POSSIBLE INTERFERENCE. THIS HAS ALL BEEN DONE W ITH THE MONEY OF THE ULTIMATE BUYER WITHOUT ANY COMMITMENT OF HIS OWN. T HE TRANSACTION IS CLEARLY DRIVEN BY COMMERCE. THE INTENTION TO EXPLOIT THE LA ND FOR ITS OWN AGRICULTURAL USE IS NOT BORNE OUT ON THESE FACTS. AS PER RECORDS , THE ASSESSEE HAS REFLECTED MEAGER INCOME FROM CULTIVATION OF EXISTING LAND. TH E OCCUPATION OF THE ASSESSEE AS NOTED BY THE REVENUE IS PRE DOMINANTLY LEANED TOWARDS LEGAL PROFESSION. 7.8 PERTINENT TO NOTE HERE THAT THE HONBLE SUPREME COURT IN THE CASE OF DALMIA CEMENT LTD. VS. CIT 1976 CTR (SC) 442 HELD T HAT IT IS NOT POSSIBLE TO EVOLVE ANY SINGLE LEGAL TEST OR FORMULA WHICH COULD BE APPLIED IN DETERMINING WHETHER A TRANSACTION IS AN ADVENTURE IN THE NATURE OF TRADE AND THAT THE ANSWER TO THE QUESTION MUST DEPEND IN EACH CASE ON THE TOT AL IMPRESSION AND EFFECT OF ALL THE RELEVANT FACTORS AND CIRCUMSTANCES PROVED T HEREIN AND WHICH DETERMINE THE CHARACTER OF THE TRANSACTION. 14 ITA NO.1960/PN/2014 7.9 THUS, THE CUMULATIVE FACTS AND CIRCUMSTANCES SE EN HOLISTICALLY AND READ IN CONJUNCTION THE TESTS OR PARAMETERS LAID DOWN BY JUDICIAL PRECEDENTS PROVIDES SOUND BASIS TO INFER THE INTENTION OF COMM ERCIAL GAIN IN THE IMPUGNED TRANSACTION. 8. HAVING REGARD TO THE TOTALITY OF FACTS AND CIRCU MSTANCES, WE HAVE NO HESITATION TO HOLD THAT THE IMPUGNED LAND WAS PURCH ASED WITH AN INTENTION TO SELL THE SAME TO THE IDENTIFIED BUYERS TO ACHIEVE C OMMERCIAL OBJECTIVES OUTRIGHT. AS NOTED EARLIER, SECTION 2(13) OF THE A CT SEEK TO EXPLAIN THE TERM OF BUSINESS BY WAY OF INCLUSIVE DEFINITION. AS PER SECTION 2(13) EXPRESSION BUSINESS INCLUDE NOT ONLY TRADE OR COMMERCE, ETC. BUT DEFINITION FURTHER EXTENDS TO ENCOMPASS WITHIN ITS AMBIT AN ADVENTURE IN THE NATURE OF TRADE. THE ENTIRE GAMUT OF ACTION OF THE ASSESSEE IN ENGAG ING IN SUCH BIG TICKET LAND PURCHASE WITHOUT EMPLOYING ANY FUND OF HIS OWN AND ALMOST IMMEDIATE RE-SALE THEREOF CLEARLY DEMONSTRATES THE IMPLICIT INTENTION OF THE ASSESSEE THAT THE TRANSACTION ENTERED WAS NOTHING BUT AN ADVENTURE I N THE NATURE OF TRADE I.E. A BUSINESS TRANSACTION UNDER EXTENDED DEFINITION OF S . 2(13) OF THE ACT. CONSEQUENTLY, PROFITS ARISING THEREFROM ACQUIRES TH E CHARACTER OF BUSINESS INCOME CHARGEABLE UNDER S. 28 OF THE ACT. 9. SEVERAL JUDICIAL PRECEDENTS WERE QUOTED ON BEHAL F OF THE ASSESSEE TO SUPPORT HIS CASE. AS ALREADY NOTED, THE ISSUE IS ES SENTIALLY FACTUAL AND THUS INFERENCE WOULD VARY FROM CASE TO CASE DEPENDING ON ITS OWN FACTS. THE DECISION OF CO-ORDINATE BENCH OF TRIBUNAL IN ANIL R . BIHANI VS. ITO ITA NO. 2502/PN/ 2012 ORDER DATED 11-04-2016 RELIED UPON BY ASSESSEE WAS RENDERED IN ITS OWN SET OF FACTS AND IS CLEARLY DISTINGUISHA BLE. THERE IS NO REFERENCE TO ANY BORROWED FUNDS FOR ACQUISITION OF ASSET IN THAT CASE. THE PURCHASE WAS THUS OUT OF ITS OWN RESOURCES WHICH FACT SERVES AS ONE O F THE CRUCIAL INDICATORS OF THE INTENTION READ IN CONJUNCTION WITH OTHER FACTS IN THE PRESENT CASE. SIMILARLY, DECISIONS IN THE CASE OF MARIGOLD MERCHANISE (P) LT D. 164 TTJ 448 (DEL.) ; SURENDRA KESHAVLAL SHAH VS. DCIT ITA NO. 1308/ PN/2 011 ORDER DATED 24/07/2015 & ACIT VS. ALPANA SURENDRA SANCHETI ITA NO. 1081/ PN/ 2011 15 ITA NO.1960/PN/2014 ORDER DATED 22/03/2013 REFERRED TO AND RELIED UPON AT THE TIME OF HEARING WERE PERUSED AND FOUND TO BE MATERIALLY DIFFERENT IN FAC TS QUA THE FACTS OF THIS CASE IN TERMS OF BORROWALS, CAPACITY TO HOLD THE PROPERT Y ACQUIRED, TIME HORIZON OF HOLDING, EXPLOITATION FOR CULTIVATION OF CROP ETC. WHERE EACH OF THESE FACTS MAY HAVE MATERIAL BEARING IN THE DETERMINATION OF INTEN TION AT THE TIME OF ACQUISITION OF A PROPERTY. THUS, WE ARE UNABLE TO R ECONCILE THE FACTS OF THE PRESENT APPEAL WITH THE PRECEDENTS QUOTED AT THE BA R. SUFFICE IT TO SAY THAT IN NONE OF THESE JUDGMENTS CITED, THE ACTION OF PURCHA SE OF LAND WERE FOUND TO BE IN CONCERT WITH THE ULTIMATE AND IDENTIFIED BUYERS AND OWNERSHIP WERE TRANSFERRED IN SUCH A SHORT SPAN OF TIME WITHOUT PU TTING THE PURPORTED AGRICULTURAL LAND FOR ITS USE AT ANY POINT OF TIME. IT IS SETTLED POSITION IN LAW THAT THE DECISION OF THE COURT HAS TO BE READ IN THE CON TEXT OF THE FACTS INVOLVED THEREIN AND NOT ON THE BASIS OF WHAT LOGICALLY FLOW S THEREFROM AS HELD BY THE SUPREME COURT IN AMBICA QUARRY WORKS VS. STATE OF G UJARAT, 1987(1) SCC 213. IN THIS VIEW OF THE MATTER, WE CONCUR WITH THE VIEW OF THE ASSESSING OFFICER AND THE CIT(A) IN BRINGING THE INCOME ARISI NG ON SALE OF LAND UNDER THE HEAD BUSINESS INCOME. 10. IN VIEW OF THE AFORESAID DISCUSSION, WE DO NOT CONSIDER IT NECESSARY TO GO INTO THE OTHER ASPECTS OF CONTROVERSY AS TO WHET HER THE IMPUGNED LAND WAS AGRICULTURAL LAND OR OTHERWISE AS THESE ASPECTS ARE RELEVANT ONLY FOR THE PURPOSE OF TAXABILITY UNDER THE HEAD CAPITAL GAIN IN THE LIGHT OF SECTION 2(14) OF THE ACT. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON THIS 12 TH DAY OF AUGUST, 2016. SD/- SD/- ( VIKAS AWASTHY ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE ; DATED : 12 TH AUGUST, 2016. 16 ITA NO.1960/PN/2014 & ' () *+( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. &, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE