Rajesh Bhalla, Lucknow V. The Income Tax Officer, Lucknow

ITA 341/LKW/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78584 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 28-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 13-05-2013
• Court: TRIBUNAL
• Department Lawyers: K R RASTOGI
• Assessee Lawyers: ALOK MITRA
• Keywords: Capital asset; Gift; Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 341/LKW/2013 ASSESSMENT YEAR: 2006 - 07 RAJESH BHALLA BHALLA MANSION, MAQBARA ROAD HAZR ATGANJ, LUCKNOW V. THE INCOME TAX OFFICER RANGE II (2) LUCKNOW PAN: ADJPB2895G (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. ALOK MITRA, D.R. RESPONDENT BY: SHRI. K. R. RASTOGI, ADVOCATE DATE OF HEARING: 28 0 5 2014 DATE OF PRONOUNCEMENT: 23 0 6 201 4 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) ON A SOLITARY GROUND THAT THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.12,53,820/ - AS BUSINESS INCOME INST EAD OF LONG TERM CAPITAL GAIN WITH RESPECT TO THE SALE OF AGRICULTURAL LAND. 2 . THE BRIEF FACTS BORNE OUT FROM THE RECORD WITH REGARD TO THE IMPUGNED ISSUE ARE THAT THROUGH HIS RETURN OF INCOME , THE ASSESSEE HAS OFFERED LONG TERM CAPITAL GAIN ON SALE OF HIS A GRICULTURAL LAND ACQUIRED BY HIM BY INHERITANCE. THE ASSESSING OFFICER TREATED IT TO BE SHORT TERM CAPITAL GAIN AND MADE ADDITION OF RS.12,53,820/ - , AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A) AND DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SALE OF LAND SHOULD NOT BE TREATED AS ADVENTURE IN THE NATURE OF TRADE. THE ASSESSEE VIDE REPLY DATED PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : 14.2.2013 HAS SUBMITTED THAT THE SAID AGRICULTURAL LAND WAS ANCESTRAL LAND AND IT WAS MUTATED IN THE NAMES OF RAJESH BHALLA, DEEPAK KUMAR BHALLA AND VIVEK KUMAR BHALLA AFTER THE DEATH OF THEIR PARENTS. THE LAND WAS FOR AGRICULTURAL PURPOSES AND AGRICULTURAL INCOME HAS BEEN SHOWN IN THE RETURN OF INCOME. IT WAS FURTHER SUBMITTED THAT WITH AN INTENTION TO EARN PROFIT, THE OWNERS OF THE LAND DECIDED TO DEVELOP IT AND APPLIED FOR CHANGE OF LAND USE UNDER SECTION 143 OF U.P. ZA AND LR ACT, 1950. VIDE ORDER DATED 7.7.2005 PASSED BY THE SD M, HASSANGANJ, UNNAO THE LAND U SE WAS CHANGED. THEREAFTER, THE LAND WAS PLOTT ED, ROAD WAS PROVIDED AND OTHER DEVELOPMENT WORKS WERE CARRIED OUT. IT WAS ALSO CONTENDED THAT THE PLOTTING AND DEVELOPING OF LAND BEFORE SALE BY ITSELF WOULD NOT ESTABLISH THAT THE ASSESSEE WAS INDULGING IN A TRADING ACTIVITY. THEREFORE, THE ASSESSEE HA S RIGHTLY SHOWN ACCRUAL OF LONG TERM CAPITAL GAIN ON SALE OF PLOT. IN SUPPORT OF HIS CONTENTION, HE HAS PLACED RELIANCE UPON THE FOLLOWING JUDGMENTS: - 1 . CIT VS. SHASHI KUMAR AGRAWAL, 195 ITR 767 (ALL.). 2 . CIT VS. SURESH CHAND GOYAL [2007] 163 TAXMAN 54 (MP). 3 . CIT VS. SMT. SANJEEDA BEGUM [2006] 154 TAXMAN 346 (ALL.) 3 . THE LD. CIT(A) RE - EXAMINED THE ISSUE IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD AND HAS OBSERVED THAT THE ASSESSEE ALONG WITH HIS TWO BROTHERS ENTERED INTO AN AGREEMENT WITH M/S BHALLA FARMS P VT. LTD. FOR SELLING THE LAND THROUGH THE COMPANY. AS PER AGREEMENT, M/S BHALLA FARMS PVT. LTD. WAS MADE A S A FACILITATOR TO DO REFURBISHING WORK, CARVE OUT PLOTS TO ALIENATE IT, COLLECT THE ADVANCE/PROCEEDS FOR SALE OF LAND FROM THE PROSPECTIVE BUYERS AN D MAKE PAYMENT OF AMOUNT SO COLLECTED ON BEHALF OF THE CO - OWNERS TO THEM AFTER RETAINING 10% OF SALE PROCEEDS . THE LD. CIT(A) HAS ALSO OBSERVED THAT IT WAS ALSO AGREED AMONG THE ASSESSEE AND HIS BROTHERS THAT WHATEVER LAND IS LEFT SHALL BE SHARED EQUALLY BY THEM. THE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : AGREEMENT EXECUTED BETWEEN THE ASSESSEE AND HIS BROTHER WITH M/S BHALLA FARMS PVT. LTD. WAS EXAMINED BY THE LD. CIT(A) AND HE CAME TO THE CONCLUSION THAT THERE WAS A SCHEME , SYSTEM AND BUSINESS OPERATION S EXISTED IN THE ENTIRE ACTIVITY. THER EFORE, THE TRANSACTION OF PURCHASE AND SALE AMOUNTED TO AD VENTURE IN THE NATURE OF TRADE. 4 . AGGRIEVED, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL, WITH THE SUBMISSION THAT THE ASSESSEE ALONG WITH HIS BROTHERS HAVE ACQUIRED THE IMPUGNED AGRICULT URAL LAND AND HAVE BEEN SHOWING AGRICULTURAL INCOME THEREFROM REGULARLY IN HIS RETURN OF INCOME. WITH AN INTENTION TO EARN MORE PROFIT, THE CO - OWNERS HAVE DECIDED TO CONVERT IT TO NON - AGRICULTURE PURPOSES. HAVING GOT CONVERTED IT S USE, THEY ENTERED INTO AN AGREEMENT WITH M/S BHALLA FARMS PVT. LTD. AND PREPARED A LAY OUT PLAN FOR PLOTTING OF THE LAND INTO SMALL PLOTS WITH THE PROVISIONS OF ROADS, STREET LIGHT, ETC. ACCORDINGLY, THE PLOTS WERE SOLD AND CAPITAL GAIN WAS OFFERED IN HIS RETURN OF INCOME. IT WAS FURTHER CONTENDED THAT SINCE THE ASSESSEE HAS SOLD HIS AGRICULTURAL LAND ACQUIRED BY WAY OF INHERITANCE FROM HIS PARENTS, THE LONG TERM CAPITAL GAIN WAS ARISEN TO THE ASSESSEE AND THE SAME WAS OFFERED TO TAX THROUGH RETURN OF INCOME. M/S BHALLA FARMS PVT. LTD. WERE SIMPLY USED AS A FACILITATOR AND NO COMMERCIAL AGREEMENT WAS EVER EXECUTED WITH THEM. RELIANCE WAS ALSO PLACED UPON THE AGREEMENT IN SUPPORT OF THESE FACTS. HE HAS PLACED RELIANCE UPON THE FOLLOWING JUDGMENTS: - ( I ) CIT VS. SHASHI KUMAR AGRAWAL , 195 ITR 767. ( II ) CIT VS. SURESH CHAND GOYAL, 163 TAXMAN 54. ( III ) CIT VS. SMT. SANJEEJDA BEGUM, 154 TAXMAN 346 5 . THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO TRIED TO DISTINGUISH THE CASE LAWS REFERRED TO BY THE LD. CIT(A). PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : 6 . THE LD. D.R., ON THE OTHER HAND, BESIDES PLAC ING RELIANCE UPON THE ORDER OF THE LD. CIT(A), HAS CONTENDED THAT THE ASSESSEE HAS ADMITTEDLY ENTERED INTO AN AGREEMENT WITH M/S BHALLA FARMS PVT. LTD. IN ORDER TO DEVELOP THE LAND, OF WHICH USE WAS CONVERTED FROM AGRICULTURAL TO COMMERCIAL AND THEREAFTER THE LAND WAS SOLD TO DIFFERENT BUYERS. THESE ACTIVITIES WERE UNDERTAKEN BY M/S BHALLA FARMS PVT. LTD. THEREFORE, THE TRANSACTIONS AMOUNTED TO ADVENTURE IN THE NATURE OF TRADE. 7 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CA REFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW AND THE JUDGMENTS REFERRED TO BY THE PARTIES AND OTHER MATERIAL AVAILABLE ON RECORD, WE FIND THAT THOUGH THE ASSESSEE HAS OFFERED LONG TERM CAPITAL GAIN THROUGH HIS RETURN OF INCOME, BUT IT WAS TREATED T O BE SHORT TERM CAPITAL GAIN BY THE ASSESSING OFFICER, AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A) AND THE LD. CIT(A) TREATED THE ACTIVITY OF DEVELOPMENT A ND SALE OF PLOTS AS AN ACTIVITY AS ADVENTURE IN THE NATURE OF TRADE AND CAPITAL GAIN WAS TREATED TO BE THE BUSINESS INCOME OF THE ASSESSEE. FROM A CAREFUL PERUSAL OF THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT UNDISPUTEDLY THE ASSESSEE ALONG WITH HIS BROTHERS, HAS ACQUIRED THE AGRICULTURAL LAND BY WAY OF INHERITANCE ON THE DEMISE OF THEIR PARENTS AND WITH AN OBJECT TO EARN MORE PROFIT THE ASSESSEE GOT THE LAND USE CONVERTED FROM AGRICULTURAL TO NON - AGRICULTURAL PURPOSES. HAVING GOT THE LAND USE CHANGED, THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WITH M/S BHALLA FARMS PVT. LTD. FOR GETTING THE LAND DEVELOPED AND CARV ED OUT THE PLOTS AND THEREAFTER SOLD TO DIFFERENT BUYERS. WE HAVE CAREFULLY PERUSED THE AGREEMENT EXECUTED BETWEEN THE ASSESSEE AND M/S BHALLA FARMS PVT. LTD. AND WE FIND THAT THE WORK ASSIGNED TO M/S BHALLA FARMS PVT. LTD. WAS TO ACT AS A FACILITATOR FOR DEVELOPING THE LAND AND CARVING OUT PLOTS AND ROADS, ETC . FOR ITS SALE . B ESIDES , NO OTHER WORK WAS ASSIGNED TO M/S BHALLA FARMS PVT. LTD. IT IS ALSO EVIDENT FROM THE AGREEMENT THAT THEY HAVE NOT AGREED TO BUY ANY OTHER LAND FO R THE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : DEVELOPMENT AND ITS SALE. M/S BHALLA FARMS PVT. LTD. WAS ONLY USED TO BE AS A FACILITATOR FOR DEVELOPMENT OF LAND, CARVING OUT OF PLOTS, CONSTRUCTION OF ROADS, ETC. AND ALSO TO ASSIST THE ASSESSEE IN SALE OF PLOTS. WE HAVE CAREFULLY PERUSED THE JUD GMENTS REFERRED TO BY THE PARTIES AND WE FIND THAT THROUGH THESE JUDGMENTS IT HAS BEEN HELD THAT IF THE ASSESSEE IS ENGAGED IN THE ACTIVITY OF PURCHASE AND SALE OF PLOTS, THEN HE CAN BE CALLED TO BE ENGAGED IN THE ACTIVITIES OF ADVENTURE IN THE NATURE OF T RADE. 8 . ON PERUSAL OF THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SHASHI KUMAR AGRAWAL (SUPRA), WE FIND THAT THE LAND IN QUESTION WAS NOT PURCHASED BY THE ASSESSEE, BUT WAS RECEIVED BY HIM FROM HIS FATHER UNDER A DEED OF GI FT AND SINCE THE ASSESSEE WAS STAYING AT DIFFERENT PLACES IN CONNECTION WITH HIS OFFICIAL DUTIES, HE WAS NOT IN A POSITION TO CARRY OUT AGRICULTURAL OPERATION AND FINALLY HE SOLD THE LAND AFTER PLOTTING IT OUT IN ORDER TO SECURE BETTER PRICE. THE HON'BLE HIGH COURT DID NOT APPROVE THE ACTION OF THE ASSESSING OFFICER OF TREATING THIS ACTIVITY AS AN ADVENTURE IN THE NATURE OF TRADE. THEIR LORDSHIPS HAVE HELD THAT SALE OF LAND , AFTER PLOTTING IT OUT IN ORDER TO SECURE BETTER PRICE , CANNOT BE CALLED THAT ASSE SSEE HAS EMBARKED AN ADVENTURE IN THE NATURE OF TRADE. THE GAIN ARISING ON SALE OF LAND WAS NOT, THEREFORE, ASSESSABLE AS INCOME FROM BUSINESS. THE RELEVANT OBSERVATIONS OF THEIR LORDSHIPS IN THE CASE OF CIT VS. SHASHI KUMAR AGRAWAL (SUPRA) ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE: - HELD, THAT THE TRIBUNAL HAD FOUND THAT THE LAND IN QUESTION WAS NOT PURCHASED BY THE ASSESSEE BUT WAS RECEIVED BY HIM FROM HIS FATHER UNDER A DEED OF GIFT. SINCE THE ASSESSEE WAS STAYING IN A DIFFERENT PLACE IN CONNE CTION WITH HIS OFFICIAL DUTIES AND WAS NOT IN A POSITION TO CARRY ON AGRICULTURAL OPERATIONS, HE SOLD THE LAND. THE TRIBUNAL FOUND THAT HE HAD SOLD THE LAND AFTER PLOTTING IT OUT IN ORDER TO SECURE A BETTER PRICE AND THAT HE HAD NOT EMBARKED ON AN ADVENTUR E IN THE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 6 - : NATURE OF TRADE. THIS WAS ESSENTIALLY A QUESTION OF FACT. THE GAIN ARISING ON SALE OF LAND WAS NOT, THEREFORE, ASSESSABLE AS INCOME FROM BUSINESS. 9 . SIMILAR IS THE POSITION IN THE CASE OF CIT VS. SURESH CHAND GOYAL (SUPRA) WHEREIN THE HON'BLE M. P. HIGH COURT HA S ALSO OBSERVED O N A SIMILAR LINE. IN THAT CASE, THE ASSESSEE RECEIVED CERTAIN AGRICULTURAL LAND BY WAY OF GIFT DEED. THEREAFTER HE GOT THE SAID LAND CON VERTED FOR NON - AGRICULTURAL PURPOSES AND T HEREAFTERS CONVERTED INTO PLOTS AND IN ALL 40 PLO TS WERE CARVED OUT. THE ASSESSEE UNDERTOOK THE DEVELOPMENT WORK OF THE COLONY SUCH AS LEVELING OF THE LAND, CONSTRUCTION OF ROADS, AND DRAINAGE SYSTEM, ETC., AND THEREAFTER SOLD THE SAID PLOTS. THOUGH THE ASSESSING OFFICER HAS HELD THAT THE ACTIVITIES OF SELLING THE PLOTS TO DIFFERENT MEMBERS IN DIFFERENT ASSESSMENT YEARS AMOUNTED TO AN ADVENTURE IN THE NATURE OF TRADE, BUT THE HON'BLE M. P. HIGH COURT HAS APPROVED THE VIEW OF THE TRIBUNAL THAT GAIN ARISING OUT OF THE SALE OF PLOT WAS INCOME IN THE NAT URE OF CAPITAL GAIN, SINCE THE SALE OF PLOT WAS NOT THE BUSINESS ACTIVITY. THE RELEVANT OBSERVATIONS OF THE HON'BLE M. P. HIGH COURT ARE EXTRACTED HEREUNDER: - THE SELLING OF OWN LAND AFTER PLOTTING IT OUT IN ORDER TO SECURE BETTER PRICE, IS NOT AN ADVEN TURE IN THE NATURE OF TRADE OR BUSINESS. THE WORD 'BUSINESS' HAS BEEN DEFINED UNDER SECTION 2 (13) OF THE INCOME - TAX ACT, 1961, WHICH INCLUDES ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE. A N ISOLATED TRANSACTION OR ACTIVITY CANNOT BE PART OF BUSINESS. TO CONSIDER THE QUESTION OF BUSINESS, THERE MUST BE REGULAR ACTIVITY OF PURCHASING AND SELLING. IN THIS CASE; THERE IS NOTHING ON RECORD TO SHOW THAT THE LAND WAS PURCHASED, FOR THE PURPOSE OF SELLING INTO PLOTS. BASICALLY, IT IS A GIFTED LAND AND THE LAND WAS DEVELOPED AND WAS SOLD AFTER CONVERTING INTO THE PLOTS WITH A PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 7 - : VIEW TO SECURE THE BETTER PRICE, THEREFORE, THE ISOLATED ACTIVITY CANNOT COME WITHIN THE PURVIEW OF ADVENTURE IN THE NATURE OF TRADE AND BUSINESS. THE MAIN EARNING ON THE SALE OF THE LAND WAS IN THE NATURE OF CAPITAL GAIN AND, THEREFORE, NOT ASSESSABLE HIS INCOME FROM BUSINESS AND THIS QUESTION IS ESSENTIALLY A QUESTION OF FACT. THERE IS NO DISPUTE THAT CIRCULAR ISSUED BY CBDT I S BINDING ON THE REVENUE AND IN VIEW OF THE AFORESAID CIRCULAR FOR THE TAX LIABILITY BELOW RS. 2 LAKHS, THE REVENUE CANNOT FILE APPEAL. WE UPHOLD THE OBJECTIONS RAISED BY THE LEARNED COUNSEL FOR THE RESPONDENT AND HOLD THAT THE APPEAL IS NOT MAINTAINABLE. 10 . WE HAVE ALSO EXAMINED THE OTHER CASE LAWS, WHICH WERE REFERRED TO BY THE LD. CIT(A) WHILE TREATING THE ACTIVITY OF THE ASSESSEE TO BE AS A SALE AMOUNTING TO ADVENTURE IN THE NATURE OF TRADE. A REFERENCE TO THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF RAJENDRA KUMAR DWIVEDI VS. CIT, KANPUR IN IT APPEAL NOS.33 OF 2002, 457 & 458 OF 2007 WAS MADE BY THE LD. CIT(A) AND FROM A CAREFUL PERUSAL OF THE JUDGMENT, WE FIND THAT IN THAT CASE THE ASSESSEE H AS PURCHASED LAND, BESIDES HAVING INHE RITED SOME LAND FROM HIS FATHER. THEREAFTER THE LAND WAS CONVERTED INTO SMALL PLOTS AND SOLD OUT TO DIFFERENT BUYERS BY EXECUTING ALMOST 43 SALE DEEDS BETWEEN 1984 AND 1991. IN THAT CASE, THE HON'BLE HIGH COURT HAS HELD THAT SINCE NO AGRICULTURAL OPERATI ON WAS CARRIED OUT , THE INCOME - TAX AUTHORITIES HAVE RIGHTLY CONCLUDED THAT THE CAPITAL ASSET WAS CONVERTED INTO STOCK - IN - TRADE, AN D TH E SALE OF PLOTS IN THE CASE OF SUCH LAND WOULD BE TREATED TO BE BUSINESS ACTIVITY TO MAKE PROFITS. BUT, IN THE INSTANT CA SE, THE ASSESSEE HAS NOT PURCHASED ANY PIECE OF LAND. THE ASSESSEE ONLY INHERITED THE LAND ON THE DEMISE OF HIS PARENTS AND USE OF THAT LAND WAS CONV ERTED IN TO NON - AGRICULTURAL USE AND THEREAFTER IT WAS PLOTTED WITH THE HELP OF A FACILITATOR, M/S BHALLA F ARMS PVT. LTD. THEREFORE, THE FACTS IN THE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 8 - : INSTANT CASE ARE NOT SIMILAR TO THE FACTS OF RAJENDRA KUMAR DWIVEDI VS. CIT, KANPUR S (SUPRA) CASE. THEREFORE, THE RATIO LAID DOWN THEREIN CANNOT BE APPLIED HERE. MOREOVER, THE RATIO LAID DOWN IN OTHER CASES RE FERRED TO BY THE ASSESSEE CAN BE APPLIED TO THE PRESENT CASE , AS IN THOSE CASES ALSO THE LAND WAS ACQUIRED BY INHERITANCE AND WAS LATER ON SOLD AFTER GETTING IT PLOTTED. 11 . IN THE CASE OF CIT VS. SURESH CHAND GOYAL (SUPRA), THE HON'BLE M. P. HIGH COURT HAVE C ATEGORICALLY HELD THE WORD BUSINESS HAS BEEN DEFINED UNDER SECTION 2(13) OF THE ACT WHICH INCLUDES ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE. AN ISOLATED TRANSACTION OR ACTIVITY CANNOT BE A PART OF BUSINESS. IN THAT CASE, THEIR LORDSHIPS HAVE OBSERVED THAT SINCE THERE IS NOTHING ON RECORD TO SHOW THAT THE LAND WAS PURCHASED FOR THE PURPOSE OF SELLING INTO PLOTS , T HEREFORE, THE MAIN EARNING ON THE SALE OF THE LAND WAS IN THE NATURE OF CAPITAL GAIN AND NOT ASSESSABLE AS INCOME FROM BUSINESS. 12 . IN THE INSTANT CASE, THE ASSESSEE HAS ACQUIRED LAND BY WAY OF INHERITANCE WHICH WAS LATER ON SOLD TO DIFFERENT BUYERS WITH THE ASSISTANCE OF M/S BHALLA FARMS PVT. LTD. FOR GETTING IT PLOTTED. THEREFORE, THE AS SESSEE HAS UNDERTAKEN THE ACTIVITY OF SELLING OF PLOTS AND THERE WAS NO PURCHASE OF LAND FOR ITS SALE AND HENCE THE ASSESSEE CANNOT BE CALLED TO BE ENGAGED IN THE ACTIVITIES OF ADVENTURE IN THE NATURE OF TRADE. THEREFORE, WE DO NOT AGREE WITH THE FINDINGS OF THE LD. CIT(A) IN THIS REGARD. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) AND HOLD THAT THE GAINS ACCRUED TO THE ASSESSEE ON SALE OF PLOTS WAS ONLY TO BE TREATED AS LONG TERM CAPITAL GAIN , IF OTHER REQUISITE CONDITIONS WITH REGARD TO THE PER IOD OF HOLDING OF CAPITAL ASSET IS SATISFIED. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO TREAT THI S INCOME ON SALE OF PLOTS AS LONG TERM CAPITAL GAIN AFTER MAKING NECESSARY VERIFICATION WITH REGARD TO THE PERIOD OF HOLDING OF THE CAPITAL ASSET, AS TH E CAPITAL ASSET WAS ACQUIRED BY THE ASSESSEE BY WAY OF PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 9 - : INHERITANCE ON THE DEMISE OF HIS PARENTS AND THE DATE OF DEMISE OF THE PARENTS IS NOT AVAILABLE ON RECORD . 13 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23.6.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD JUNE , 2014 JJ: 1206 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )