Sh. Ramesh Chand, Roorkee V. ACIT, Haridwar

ITA 2014/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5222 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 12-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N C UPADHYAY
• Keywords: Capital asset; Business income
• Section: 22; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH, DEHRADUN BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 2014/DEL/2016 : ASSTT. YEAR : 2007-08 RAMESH CHAND, S/O SH. ANAND PRAKASH, MAIN BAZAR, NEAR MANDIR, BHAGWANPUR, ROORKEE-247667 VS ACIT, HARIDWAR (APPELLANT) (RESPONDENT) PAN NO. A UAPC2368R ASSESSEE BY : SH. R.K GUPTA, ADV. REVENUE BY : SH. N. C. UPADHYAY, SR. DR DATE OF HEAR ING: 17 . 09 .20 21 DATE OF PRONOUNCEMENT: 22 .0 9 .20 21 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), DEHRADUN DATED 27.01.2 016. 2. BASED ON THE ENQUIRIES MADE BY THE ASSISTANT DIRECT(IN V.), UNIT-II, DEHRADUN THAT THE ASSESSEE HAS EARNED PROFIT OF RS.71,09, 960/- OUT OF SALE PROCEEDS OF LAND AND THAT THE ASSESSEE HAS NOT FILED R ETURN OF INCOME FOR THE A.Y. 2007-08, A NOTICE U/S 148 HAS BEEN ISSUED B Y THE ITO, WARD- 2, ROORKEE. 3. THE ONLY ISSUE IS WITH REGARD TO ADDITION OF RS.71,0 9,960/- ARISING OUT OF PROFIT EARNED BY THE ASSESSEE FOR SALE OF TWO PAR CELS OF AGRICULTURAL LAND SITUATED AT BHAGWANPUR DISTRICT, ROORKEE. THE AO HAS MADE ADDITION ON THE GROUND THAT INCOME RESULTING FROM SALE OF AGRICU LTURAL LAND IS TO BE CHARGED AS INCOME FROM BUSINESS WHICH WAS SUBSEQUENTLY CONFI RMED BY ITA NO. 2014/DEL/2016 RAMESH CHAND 2 THE LD. CIT (A) THOUGH HE HELD THAT SUCH LAND WERE A GRICULTURAL LAND. THE RELEVANT FACTS CULLED FOR THE ADJUDICATION OF THE ISSUE ARE THAT THE ASSESSEE HAS PURCHASED 5830 SQ. MTR. OF LAND ON 25.02.2005 SITUAT ED AT VILLAGE LAKHESWARI, BHAGWANPUR, ROORKEE AND SOLD THE SAME ON 0 4.07.2006. ANOTHER PARCEL OF LAND WAS PURCHASED ON 16.02.2006 AND SOLD ON 13.04.2006. NO DOUBT, THE ASSESSEE MADE PROFIT @ 1500% TO 3800% ON THESE TRANSACTIONS. THE AO HELD THAT SUCH ACQUISITION AND SALE OF LAND CAN BE DESCRIBED AS A BUSINESS VENTURE AND HENCE TREATED THE P ROFIT AS BUSINESS INCOME. THE AO HAS ALSO HELD THAT THE LAND SOLD WAS NOT AGRICULTURAL LAND BUT INDUSTRIAL LAND AT THE TIME OF SALE. 4. THE LD. CIT (A) CONFIRMED THE ADDITION MADE ON TH E GROUNDS THAT THOUGH THE ASSET IS AN AGRICULTURAL LAND SINCE IT IS PURCHA SED WITH A VIEW OF SELLING IT TO MAKE HUGE PROFIT THEN SUCH PROFITS FROM T HE SALE OF LAND CAN BE BROUGHT TO TAX AS BUSINESS INCOME AS THE SAME COULD BE AN A DVENTURE IN THE NATURE OF TRADE. 5. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 6. WE FIND FROM THE RECORD THAT THE LAND CONTINUED TO BE USED FOR AGRICULTURAL DURING THE PERIOD OF POSITION BY THE ASSESSE E. THE AREA HAS BEEN NOTIFIED AS INDUSTRIAL ESTATE BY DEPARTMENT OF I NDUSTRIAL DEVELOPMENT, GOVERNMENT OF UTTARAKHAND VIDE ORDER D ATED 15.12.2005. THE NOTIFICATION WOULD NOT ALTER THE CHARACTER OF THE LAND AND DOESNT IMMEDIATELY RENDERS IT INTO A CAPITAL ASSET. THE LAND W AS NEVER CONVERTED INTO NON-AGRICULTURAL BY RESORTING TO SPECIFIC PROVISION S OF CONVERSION OF LAND USED BY THE APPROPRIATE AUTHORITIES. THE ASSET HAS NOT LOST ITS CHARACTER OF BEING AN AGRICULTURAL LAND AT THE TIME OF PURCHASE AS WELL AS AT THE TIME OF SALE. THE ONLY REASON REVENUE BROUGHT THE TRANSACTION FOR TAXATION IS THAT THE ASSESSEE HAS EARNED HUGE PROFITS AS SPE LLED OUT IN THE ITA NO. 2014/DEL/2016 RAMESH CHAND 3 ORDER OF LD. CIT (A) DISREGARDING THE EVIDENCE DECIPHE RABLE FROM THE REVENUE RECORDS FILED BEFORE THEM. 7. HENCE, TAKING INTO ENTIRE FACTS OF THE CASE INTO CONSIDE RATION, WE HEREBY HOLD THAT THE SALE PROCEEDS OF THE SAID ASSET IS NO T LIABLE TO TAX. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/09/2021. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 22/09/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR