DIPAK BABARAO ARODE, Nagpur V. ITO, WARD-6(1), Nagpur

ITA 325/NAG/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1399 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 11-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 26-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: K S BAHRI
• Keywords: Capital asset; Business income

Judgement Text

1 ITA NO. 325/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 325 /NAG/2013. ASSESSMENT YEAR : 2009 - 10. D IPAK BABARAO ARODE, THE INCOME - TAX OFFICER, NAGPUR. VS. WARD - 6(1), NAGPUR. PAN ADMPA4941 J . APPELLANT. RESPONDENT. APPELLANT BY : SHRI K.S. BAHRI. RESPONDENT BY : SHRI A.R. NINAWE. DATE OF HEARING : 1 8 - 07 - 2016 DATE OF P RONOUNCEMENT : 9 TH AUGUST , 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 28 - 03 - 2013 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10. THE GROUNDS OF APPEAL READ AS UNDER : 1. THAT THE LEARNED CIT(APPEALS) - II, NAGPUR GROSSLY ERRED IN MAKING ADDITIONS ON THE GROUND OF PROFIT DERIVED FROM AN ADVENTURE IN THE NATURE OF TRADE , AMOUNTING TO RS.26,27,700/ - ON ACCOUNT OF PROFIT ON SALE OF AGRICULTURAL LAND. 2. THAT ON THE FACTS AND CIRCUMSTANCES THE LEAR NED CIT(APPEALS) - II, NAGPUR IS NOT JUSTIFIED IN TREATING PURCHASE AND SALE OF AN AGRICULTURAL LAND AS BUSINESS COMMODITY AND CONSIDERING THE PROFIT, DERIVED FROM AN ADVENTURE IN THE NATURE OF TRADE. 3. THAT THE TREATMENT OF AGRICULTURAL LAND AS BUSINESS COMMODITY IS BAD IN LAW. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : 2 ITA NO. 325/NAG/2013 RETURN OF INCOME DECLARING TOTAL INCOME OF RS.3,97,701/ - WAS FILED ON 29 - 03 - 2010. THE APPELLANT DERIVED INCOME FROM RETAIL BUSINESS OF COMPUTER SPARE PARTS, SHARE PROFITS FROM THE FIRM AND INCOME FROM OTHER SOURCES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTED BY THE AO THAT APPELLANT HAS SOLD IMMOVABLE PROPERTY LOCATED AT MOUZA KALDONGARI, P.H. NO. 40/A, S.NO. 63/1, NAGPUR ON 06 - 05 - 2009 FOR CONSIDERATION OF RS. 60 LAKHS TO ONE SHRI RAJENDRA RAMESH DHORE. THE SAID PROPERTY HAD PURCHASED BY THE APPELLANT VIDE PURCHASE DEED EXECUTED ON 25 - 03 - 2008 FOR A CONSIDERATION OF RS.31,50,000/ - . THE PROFIT ARISING ON THIS TRANSACTION HAD NOT BEEN SHOWN BY THE APPELLANT IN HIS RETURN OF INCOM E. IT WAS EXPLAINED BY THE APPELLANT THAT HE HAD A CERTIFICATE FROM PATWARI , TEHSIL, NAGPUR DATED 23 - 08 - 2011 TO THE EFFECT THAT THE SAID PROPERTY IS AROUND 10 KM. AWAY FROM NAGPUR MUNICIPAL LIMIT. IT WAS ALSO SUBMITTED BY THE APPELLANT THAT WHILE THE SAID PROPERTY HAS BEEN SOLD AT RS.60 LAKHS, ONLY PART CONSIDERATION OF RS.5 LAKHS HAS BEEN RECEIVED, WHILE THE REMAINING WAS PAID BY POST DATED CHEQUES WHICH WERE NOT HONOURED. THE DETAILS OF PAYMENT RECEIVED WAS GIVEN AS UNDER : SR.NO. DATE RECEIVED I) 10 - 03 - 2008 RS. 5 LACS II) 30 - 09 - 2008 RS. 20 LACS RS. 20 LACS. RS. 15 LA CS. 3. IT WAS FURTHER SUBMITTED THAT THE POST DATED CHEQUES WERE NOT HONOURED BY THE BUYER AND THE TRANSACTION WAS NOT COMPLETED BY THEM AND SUBSTANTIAL CONSIDERATION OF THE PROPERTY WAS NOT RECEIVED AND THEREFORE THE POSSESSION OF THE PROPERTY WAS ALSO N OT HANDED OVER. THE AO MADE FURTHER ENQUIRIES BY WAY OF RECORDING THE STATEMENT OF SHRI RAJENDR RAMDAS DHORE (THE PURCHASER OF THE PROPERTY) WHEREIN THE ABOVE FACT OF PAYMENT OF RS. 5 LAKHS AND THE 3 ITA NO. 325/NAG/2013 DISHONOURING OF THE POST DATED CHEQUES WAS CONFIRMED BY HI M. IT WAS FURTHER STATED BY HIM THAT HE HAD RECEIVED POSSESSION OF THE SAID PROPERTY ON 22 - 04 - 2009 AND THAT HE HAD LATER SOLD 14 PLOTS TO ONE M/S UNITED BUILDERS AND DEVELOPERS FOR RS. 15 LAKHS AND 14 PLOTS TO SHRI SAHEBRAO WADEKAR FOR RS. 15 LAKHS AND TH E SALE PROCEEDS TOTALLING RS. 30 LAKHS WERE DIRECTLY PAID TO THE APPELLANT BY THESE TWO PURCHASE PARTIES. 4. THE AO FURTHER NOTED THAT ON PERUSAL OF THE SAID SALE DEED OF PLOT SOLD BY RAJENDRA RAMDAS DHORE TO M/S UNITED BUILDERS AND DEVELOPERS AND TO SHRI SAHEBRAO WADEKAR IT COULD BE SEEN THAT THE APPELLANT WAS ALSO A SIGNATORY TO THE SAID SALE DEEDS IN THE CAPACITY OF BEING A WITNESS TO THE TRANSACTION. THE AO CONCLUDED THAT THE APPELLANT HAD ALREADY HANDED OVER THE POSSESSION OF THE SAID PROPERTY TO THE P URCHASER AND THE TRANSACTION OF SALE OF PROPERTY WAS THEREFORE COMPLETED. IT WAS ALSO NOTED BY THE AO THAT THE SAID SHRI RAJENDRA RAMDAS DHORE HAD CLEARLY MENTIONED THAT THE PROCESS OF CONVERSION OF THE SAID PLOT OF LAND INTO NON AGRICULTURAL LAND WAS NOT DONE BY HIM. THE AO HAS FURTHER NOTED THAT THE SAL E DEED REFERRED TO COLLECTORS ORDER DATED 05 - 07 - 2008 REGARDING THE CONVERSION OF THE SAID LAND INTO NON AGRICULTURAL LAND AND IN THESE ORDERS IT WAS CLEARLY MENTIONED THAT THE APPELLANT, ON BEHALF OF SHRI HARIBHAU KASHINATH MENDHE, HAD MADE AN APPLICATION FOR CONVERSION OF AGRICULTURAL LAND INTO NA LAND FOR RESIDENTIAL PURPOSE. 5. THE AO, THEREFORE, CAME TO THE CONCLUSION THAT THE APPELLANT HAD ENTERED INTO A TRANSACTION WITH BUSINESS INTENTION AND, THERE FORE, ASKED THE APPELLANT TO EXPLAIN AS TO WHY THE PROFIT SHOULD NOT BE TREATED AS BUSINESS INCOME. THE APPELLANT EXPLAINED THAT THIS WAS THE ONLY TRANSACTION RELATED TO LAND AND THAT THE CONVERSION OF THE LAND TO NA WAS DONE BY THE APPELLANT AT THE BEHEST OF THE PURCHASER SHRI RAJENDRA RAMDAS DHORE BY THE ORIGINAL OWNER AND THAT THE APPELLANT WAS NEVER INTERESTED IN DOING SO AND SOLD THE LAND AS AN AGRICULTURAL LAND AND THAT HE WAS NOT PARTY TO THE SAID CONVERSION. IT WAS FURTHER STATED THAT IT 4 ITA NO. 325/NAG/2013 IS CLEAR F ROM THE RECORD THAT THE CONVERSION WAS DONE AFTER THE EXECUTION OF THE SALE DEED BY THE APPELLANT. THE AO AFTER CONSIDERING THE REPLY, CAME TO THE CONCLUSION THAT THE SAID TRANSACTION WAS ENTERED INTO WITH THE BUSINESS PURPOSE AND THAT THEREFORE THE NET PR OFIT SHOULD BE TAXED AS BUSINESS INCOME. 6. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) CONSIDERED THE ASSESSEES SUBMISSIONS AND HELD AS UNDER : 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT. IN ORDER TO DETERMINE THE REAL NATURE OF TRANSACTION OF PURCHASE AND SALE, VARIOUS FACTORS ARE TO BE TAKEN INTO CONSIDERATION VIZ. THE INTENTION OF THE ASSESSEE AT THE TIME OF PURCHASE, TREATMENT OF THE LAND IN QUESTION, HO LDING PERIOD, ACTUAL USE OF LAND, LOCATION OF LAND, SURROUNDING CIRCUMSTANCES NEAR FUTURE USE OF LAND ETC. THUS THE QUESTION THAT A PARTICULAR LAND IS ACQUIRED AND RETAINED AS AN AGRICULTURAL LAND HAS TO BE DECIDED ON THE BASIS OF TOTALITY OF THE RELEVA NT FACTS AND CIRCUMSTANCES AND NOT BY APPLYING ANY SINGLE FACTOR OR TEST. 5.1 IN THE CASE AT HAND, THE INTENTION OF THE APPELLANT CAN BE MOST CLEARLY MADE OUT BY THE FACT THAT EVEN BEFORE THE SAID PROPERTY WAS PURCHASED BY THE APPELLANT ON 25 - 03 - 2008 FOR A CONSIDERATION OF RS. 31,50,000/ - , HE HAD RECEIVED THE ADVANCE PAYMENT OF RS. 5 LACS ON 10 - 03 - 2008 AGAINST THE SALE CONSIDERATION OF RS. 60 LACS FOR THE SAID PROPERTY. THIS FACT EMERGES FROM THE SALE DEED I TSELF. THUS THE FACT THAT THE APPELLANT HAD ENTERED INTO THE TRANSACTION OF SALE EVEN BEFORE EXECUTING THE PURCHASE DEED MAKES THE BUSINESS INTENTION OF THE APPELLANT MORE THAN EVIDENT. IN THIS CONTEXT IT IS IMPORTANT TO NOTE THAT EVENTUALLY THE SALE C ONSIDERATION OF RS. 30 LACS WAS RECEIVED BY THE APPELLANT DIRECTLY FROM THE BUILDERS TO WHOM THE SAID LAND WAS EVENTUALLY SOLD AND WHO PLOTTED THE LAND AND SOLD IT IN PIECES. THE APPELLANT WAS ONE OF THE 'WITNESSES' WHO SIGNED THE SALE DEED WHEN THE LAN D WAS SOLD TO RAJENDRA RAMDAS DHORE WHO HAD LATER SOLD 14 PLOTS TO ONE M/S UNITED BUILDERS AND DEVELOPERS FOR RS. 15 LACS AND 14 PLOTS TO SHRI SAHEBRAO WADEKAR FOR RS. 15 LACS AND THE SALE PROCEEDS TOTALING RS. 30 LACS WERE DIRECTLY PAID TO THE APPELLAN T BY THESE TWO PURCHASE PARTIES. 5.2 I HAVE ALSO PERUSED THE ORDER PASSED BY THE COLLECTOR OFFICE, NAGPUR DATED 05 - 07 - 2008 WHEREIN IT IS CLEAR THAT THE APPELLANT (ON BEHALF OF SHRI HARIBHAU KASHINATH MENDHE) HAS MADE THE APPLICATION TO THE COLLECTOR . OFFICE FOR THE CONVERSION OF THE SAID AGRICULTURAL LAND INTO NA LAND FOR - RESIDENTIAL PURPOSES. THUS CLEARLY THE APPELLANT WAS AWARE OF THE FACT THAT THE SAID PIECE OF LAND WOULD EVENTUALLY BE USED FOR NON AGRICULTURAL PURPOSES AND HE WAS CLEARLY ONE OF THE PARTIES TO THE PROCESS OF CONVERSION OF THE SAID LAND INTO NA LAND. THIS ACTION OF THE APPELLANT OF BEING INVOLVED IN THE CONVERSION PROCESS CLEARLY ESTABLISHES THE FACT THAT THERE WAS THE BUSINESS INTENT ON PART OF THE APPELLANT IN RESPECT OF THE SALE OF THE SAID PROPERTY. 5.3 IT IS ALSO NEEDS TO BE REMEMBERED THAT THE APPELLANT HAS NOT ENTERED INTO ANY CULTIVATION ACTIVITY ON THE SAID PIECE OF LAND. RATHER AS STATED ABOVE, HE WAS IN THE PROCESS OF CONVERTING THE LAND INTO NON AGRICULTU RAL LAND AND EVENTUALLY SOLD FOR NON AGRICULTURAL ACTIVITIES. THUS AT 5 ITA NO. 325/NAG/2013 THE TIME OF PURCHASE HE WAS HAVING COMPLETE KNOWLEDGE THAT THE LAND WILL NOT BE USED FOR AGRICULTURAL PURPOSES. THE FACT THAT NO AGRICULTURAL ACTIVITY WHAT SO EVER WAS CARRIED OUT BY THE APPELLANT ALSO ESTABLISHES THE BUSINESS INTENT OF THE APPELLANT. 5.4 THUS THE ABOVE FACTS OF NO AGRICULTURAL OPERATION BEING CA R RIED OUT IN THE SAID PROPERTY, THE EFFORTS TO CONVERT THE SAID LAND INTO NON AGRICULTURAL LAND, TAKING ADVANCE FROM THE EVENTUAL PURCHASER EVEN BEFORE THE SAID PROPERTY HAD BEEN PURCHASED AND BEING AWARE ALL ALONG THAT THE SAID LAND WILL BE USED FOR PLOTTING BY BUILDERS CLEARLY REFLECTS THE COMMERCIAL AND PROFIT ELEMENT IN THE PURCHASE AND SALE OF THE SAID PROPERTY. THE HON'BLE SUPREME COURT IN CASE OF GEMINI PICTURES CIRCUIT PRIVATE LTD. (220 ITR 43) HAS OBSERVED AND HELD IN PARAGRAPH 5 ARE AS UNDER: ' ... 5 A RECENT DECISION OF THIS COURT IN SARIFABIBI MOHMED I BRAHIM V. CFT [1993J 204 FTR 631, RENDERED BY A BENCH COMPRISING ONE OF US (B. P. JEEVON REDDY J.) IS RELIED UPON BY LEARNED COUNSEL FOR THE REVENUE. THE BENCH OBSERVED: 'WHETHER A LAND IS AN AGRICULTURAL LAND OR NOT IS ESSENTIALLY A QUESTION OF FACT. SEVERAL TESTS HAVE BEEN EVOLVED IN THE DECISIONS OF THIS 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 AND AGAINST A PARTICULAR POINT O F 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. ' SEVERAL JUDGMENTS OF THIS COURT AND THE NIGH COURTS WERE REFERRED TO INCLUDING A JUDQMENT OF THE BOMBAY HIGH COURT VS V. A. TRIVEDI [1988J 172 FTR 95. ON A CONSIDERATION OF THE FACTORS FOR AND AGAINST, THE BOMBAY HIGH COURT OBSERVED IN V. A. TRIVEDI'S CASE [1988] 172 FTR 95 THAT FOR ASCERTAINING THE TRUE CHARACTER AND THE NATURE OF THE LAND, IL MUST BE SEEN WHETHER IT HAS BEEN PUT TO USE FOR AGRICULTURAL PURPOSES_FOR A REASONABLE SPAN OF TIME PRIOR TO THE DATE OF SALE AND FURTHER WHETHER ON THE DATE OF SALE THE LAND WAS INTENDED TO BE PUT TO USE F OR AGRICULTURAL PURPOSE FOR A REASONABLE SPAN OF TIME IN FUTURE. EXAMINING T H E CASE FROM THE SAID POINT OF VIEW, THE HIGH COURT HELD THAT THE FACT THAT THE AGREEMENT OF SALE WAS ENTERED INTO BY THE ASSESSEE WITH A HOUSING SOCIETY IS OF CRUCIAL RELEVANCE SINCE IT SHOWED THAT THE ASSESSEE HAD AGREED TO SELL THE LAND FOR ADMITTEDLY NON - AGRICULTURAL PURPOSES. THE RATIO OF THE SAID DECISION WAS APPROVED IN SARIFABIBI'S CASE (1993] 204 ITR 631 (SC). 6 WE DO NOT THINK IT NECESSARY TO MULTIPLY THE, CASES, SINCE, IN OUR RESPECTFUL OPINION, NO OTHER CONCLUSION IS REASONABLY - POSSIBLE IN THE FACTS - OF THE CASE BEFORE US THAN THE ONE ARRIVED AT BY US. ALL THE THREE AUTHORITIES UNDER THE ACT TOO ARRIVED AT THE SAME CONCLUSION. WITH GREAT RESPECT TO THE LEARNED JUDGES OF THE HIGH COURT, WE FIND THEIR CONCLUSION WHOLLY UNSUSTAINABLE AND UNACCEPTABLE. ' THE REAL USE OF LAND IS VERY RELEVANT AND MATERIAL FOR DECIDING THE TRUE INTENTION OF THE ASSESSEE IN ACQUIRING THE LAND AND SELLING THE SAME. TO APPLY THE EXCEPTION OF CAPITAL ASSET AS PER SECTION 2(14)OIO THE CHARACTER OF LAND BEING AGRICULTURE HAS TO 6 ITA NO. 325/NAG/2013 BE DECIDED WITH REFERENCE TO THE INTENTION AND PURPOSE OF ACQUIRING THE LAND. ONCE IT IS BORNE OUT F ROM THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE INTENTION OF THE ASSESSEE WAS NOT TO PUT TO THE LAND FOR AGRICULTURAL USE AND ACCORDINGLY IT WAS NOT USED FOR AGRICULTURE PURPOSE BY THE ASSESSEE AS WELL AS EVEN BY THE PURCHASER, WHO IS A BUILDER, T HEN THE PROVISIONS OF SECTION 2(14)(II) WOULD NOT APPLY IN THE CASE OF THE ASSESSEE. N 6. THUS THE REAL USE OF THE LAND IS VERY RELEVANT AND MATERIAL FOR DECIDING THE TRUE INTENTION OF THE APPELLANT IN ACQUIRING AND SELLING THE LAND IN QUESTION. IN THE INSTANT CASE, BY HIS VERY CONDUCT, EVEN PRIOR TO ITS ACQUISITION, THE APPELLANT HAS NEVER LEFT ANYONE WITH ANY DOUBT REGARDING HIS INTENTION. IT WAS ALWAYS THE BUSINESS MOTIVE THAT DROVE THE APPELLANT AND THERE NEVER WAS ANY INTENTION OF HOLDING THE SA ID LAND AS AN INVESTMENT. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I HEREBY HOLD THAT THE NATURE OF TRANSACTION OF PURCHASE AND SALE OF THE SAID PROPERTY WAS AN ADVENTURE IN THE NATURE OF TRADE AND HAS TO BE TAXED ACCORDINGLY. 7 . AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 8. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SOLD THE AGRICULTURAL LAND. THAT THE SAID LAND WAS BEYOND 8 KMS. OF THE JURISDICTION OF NAGPUR MUNICIPAL CORPORATION. THAT 7/12 EXTRACTS CLEARLY INDICATE THAT THE SAID LAND WAS AGRICULTURAL L AND. HE SUBMITTED THAT THOUGH PERMISSION FOR CONVERSION INTO NON AGRICULTURAL LAND WAS MOVED THAT WAS DONE ON THE BEHEST OF THE ULTIMATE PURCHASER. LEARNED COUNSEL OF THE ASSESSEE FURTHER PLACED RELIANCE UPON THE FOLLOWING : 1. DECISION OF BOMBAY HIGH COU RT IN SMT. MALTIBAI R. KADU. 2. DECISION OF ITAT NAGPUR BENCH IN ITA NOS. 112, 113 & 147/NAG/2012. 3. CIRCULAR NO. 17/2015 DATED 06 - 10 - 2015. 4. DECISION OF KARNATAKA HIGH COURT IN 341 ITR 289. 5. DECISION OF DELHI HIGH COURT IN 335 ITR 77 HINDUSTAN INDUSTR IAL RESOURCES LTD. HENCE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SOLD AN AGRICULTURAL LAND AND THE SAME IS EXEMPT FROM THE PURVIEW OF TAXATION. 9. PER CONTRA, LEARNED D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTE D THAT EVEN BEFORE EXECUTION OF THE PURCHASE DEED OF THE SAID LAND 7 ITA NO. 325/NAG/2013 THE ASSESSEE HAD ENTERED INTO AN AGREEMENT TO SELL THE SAME. TH A T THE ASSESSEE HAS ALSO OBTAINED AN ADVANCE IN THIS REGARD. THAT THE ASSESSEE WAS PARTY AS A WITNESS TO THE SALE OF LAND TO THE BUILDERS. THAT FROM THEM THE ASSESSEE HAS DIRECTLY RECEIVED SUBSTANTIAL PART OF THE CONSIDERATION. THAT THE ASSESSEE HAS ALSO MOVED APPLICATION FOR CONVERSION OF THE SAID LAND FOR NON AGRICULTURAL USES. T HAT THERE IS NO EVIDENCE ON RECORD WHATSOEVER IN THE FORM OF INCOME/EXPENDITURE/DISCLOSURE OF AGRICULTURAL INCOME BY THE ASSESSEE FOR THE SAID LAND. HENCE LEARNED D.R. SUBMITTED THAT THE ORDERS OF THE AUTHORITIES BELOW BE UPHELD. 10. UPON CAREFUL CONSIDERATION I FIND THAT THE SAID PROPERTY WAS PURCHASED BY THE ASSESSEE ON 25 - 03 - 2008 FOR A CONSIDERATION OF RS.31,50,000/ - . PRIOR TO THIS DATE ON 10 - 03 - 2008 THE ASSESSEE HAS RECEIVED AN ADVANCE PAYMENT OF RS.5,00,000/ - AGAINST THE SALE CONSIDERATION OF RS.60,00,000/ - FOR THE SAID PROPERTY. THIS FACT EMERGES F ROM THE SALE DEED ITSELF. HENCE IT IS CLEAR THAT THE ASSESSEE HAD ENTERED INTO THE TRANSACTION OF SALE EVEN BEFORE EXECUTION OF THE PURCHASE DEED. THIS AMPLY SUPPORTS THE REVENUES CONTENTION THAT BUSINESS INTENTION OF THE ASSESSEE WAS VERY EVIDENT. 11. FU RTHER MORE AS RIGHTLY NOTED BY THE LEARNED CIT(APPEALS) IN THIS CONTEXT IT IS IMPORTANT TO NOTE THAT EVENTUALLY THE SALE CONSIDERATION OF RS. 30 LACS WAS RECEIVED BY THE A SSESSEE DIRECTLY FROM THE BUILDERS TO WHOM THE SAID LAND WAS EVENTUALLY SOLD AND WHO PLOTTED THE LAND AND SOLD IT IN PIECES . THE A SSESSEE WAS ONE OF THE WITNESSES WHO SIGNED THE SALE DEED WHEN THE LAND WAS SOLD TO RAJENDRA RAMDAS DHORE WHO HAD LATER SOLD 14 PLOTS TO ONE M/S UNITED BUILDERS AND DEVELOPERS FOR RS. 15 LACS AND 14 PLOTS TO SHRI SAHEBRAO WADEKAR FOR RS. 15 LACS AND THE SALE PROCEEDS TOTALLING RS. 30 LACS WERE DIRECTLY PAID TO THE A SSESSEE BY THESE TWO PURCHASE PARTIES. FURTHER MORE THE ASSESSEE HAS ALSO MADE APPLICATION FOR CONVERSION OF THE SAID LAND FOR NON AGRICULTURAL LA ND FOR RESIDENTIAL PURPOSE. THUS THE ASSESSEE WAS AWARE OF THE 8 ITA NO. 325/NAG/2013 PURPOSE FOR WHICH THE ENTIRE TRANSACTION WAS BEING ENTERED AT THE THRESHOLD. 12. FURTHER THERE IS NO EVIDENCE OF ANY CULTIVATION ACTIVITY ON THE SAID LAND. THE ASSESSEE HAS NOT DISCLOSED ANY AGRICULTURAL ACTIVITY/INCOME/EXPENDITURE ON THE SAID LAND. RATHER THE F A CTS OF THE CASE CLEARLY INDICATE THAT THE ASSESSEE WAS IN THE PROCESS OF CONVERTING THE LAND INTO NON AGRICULTURAL LAND AND HE EVENTUALLY SOLD FOR NON AGRICULTURAL ACTIVITIES. 13 AS H ELD BY HONBLE APEX COURT IN THE CASE OF SARIFABIBI MOHMED IBRAHIM VS. CIT 204 ITR 631; 'WHETHER A LAND IS AN AGRICULTURAL LAND OR NOT IS ESSENTIALLY A QUESTION OF FACT. SEVERAL TESTS HAVE BEEN EVOLVED IN THE DECISIONS OF THIS 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 AND 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. ' HENCE I AGREE WITH THE CONCLUSION OF THE LEARNED CIT(APPEALS) THAT THE FACTS OF THE CASE THAT NO AGRICULTURAL OPERATION BEING CARRIED OUT IN THE SAID PROPERTY, THE EFFORTS TO CONVERT THE SAID LAND INTO NON AGRICULTURAL LAND, TAKING ADVANCE FROM THE EVENTUAL PURCHASER EVEN BEFORE THE SAID PROPERTY HAD BEEN PURCHASED AND BEING AWARE ALL ALONG THAT THE SAID LAND WILL BE USED FOR PLOTTING BY BUILDERS CLEARLY REFLECTS THE COMMERCIAL AND PROFIT ELEMENT IN THE PURCHASE AND SALE OF THE SAID PROPERTY. 14. IN THIS REGARD THE DECISION OF HONBLE APEX COURT RELIED UPON BY THE LEARNED CIT(APPEALS) IN T HE CASE OF GEMINI PICTURES CIRCUIT PRIVATE LTD. 220 ITR 43 WHEREIN THE OBSERVATION OF THE HONBLE APEX COURT IN THE CASE OF SARIFABIBI MOHMED IBRAHIM VS. CIT 204 ITR 631 HAS ALSO BEEN CONSIDERED IS GERMANE AND SUPPORTS THE CASE OF THE REVENUE. 15. THE C ASE LAWS RELIED UPON BY THE LEARNED COUNSEL OF THE ASSESSEE ARE NOT 9 ITA NO. 325/NAG/2013 RELEVANT ON FACTS OF THE PRESENT CASE. THERE IS NO ISSUE OF DETERMINATION OF DISTANCE OF CROW FLIGHT OR OTHERWISE NOR THERE IS ANY DOUBT REGARDING THE ASSESSEES SEEKING PERMISSION FOR CON VERSION OF THE LAND INTO NON AGRICULTURAL USES. FURTHER MORE THE FACTS OF THE PRESENT CASE ARE CLEARLY DISTINGUISHABLE INASMUCH AS THE ASSESSEE ENTERED INTO A DEAL FOR SALE OF THE LAND PRIOR TO EXECUTION OF THE PURCHASE DEED OF THE SAID LAND. IN THESE CIRC UMSTANCES, IN MY CONSIDERED OPINION, THE CASE LAWS RELIED UPON BY THE LEARNED COUNSEL OF THE ASSESSEE ARE NOT GERMANE. 1 6 . IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT, I UPHOLD THE ORDER OF LEARNED CIT(APPEALS). 1 7 . IN THE RESULT, THIS APPEAL F ILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF AUGUST ,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 9 TH AUGUST , 2016. 10 ITA NO. 325/NAG/2013 COPY FORWARDED TO : 1. SHRI DIPAK BABARAO ARODE, 59, BANTE LAYOUT, HUDKESHWAR ROAD, NA GPUR - 440034. 2. I.T.O., WARD - 6(1) , NAGPUR. 3. C.I.T. - III, NAGPUR. 4. CIT(APPEALS), - II, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.