Harshadkumar Amrutlal Patel, Mehsana V. DCIT, Mehsana Circle, Mehsana

ITA 361/AHD/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0547 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 06-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Salary income; Additional evidence; Question of law; Cost of acquisition; Competent authority; Capital Gains
• Section: 132; 28; 143(3); 2(14); 142(1); 13; 22; 20

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 361/AHD/2019 ( ASSESSMENT YEAR : 2015-16) HARSHADKUMAR AMRUTLAL PATEL PROP. OF K Z FINANCE, 23, DWARKAPURI SOCIETY, B/H. PERFECT PLAZA, RADHANPUR ROAD, MEHSANA-384002 / VS. DCIT MEHSANA CIRCLE, MEHSANA ./ ./ PAN/GIR NO. : ABIPP5977G ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. N. DIVATIA, A.R. / RESPONDENT BY : SHRI L. P. JAIN, SR.D.R. DATE OF HEARING 20/06/2019 !'# / DATE OF PRONOUNCEMENT 16/09/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX(APPEALS), GANDHINAGAR (CIT' IN SHORT), DATED 0 7.01.2019 ARISING IN THE ASSESSMENT ORDER DATED 30.12.2017 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2013-14. ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 2 - 2. AS PER ITS GROUND OF APPEAL, THE ASSESSEE HAS CH ALLENGED THE ACTION OF THE CIT(A) IN UPHOLDING THE ACTION OF THE AO FOR TREATING THE PROFITS ARISING ON SALE OF LAND AS BUSINESS INCOME INSTEAD OF CAPITAL GAINS AS CLAIMED BY THE ASSESSEE. 3. BRIEFLY STATED, THE ASSESSEE IS AN INDIVIDUAL AN D DERIVES INCOME BY WAY OF CAPITAL GAINS AND OTHER SOURCES. THE ASS ESSEE FILED THE RETURN OF INCOME FOR AY 2015-16 IN QUESTION DECLARI NG TOTAL INCOME AT RS.1,39,32,720/- WHICH INTER ALIA INCLUDED LONG TERM CAPITAL GAINS OF RS.51,62,050/-. THE RETURN FILED BY THE ASSESSEE W AS SUBJECTED TO SCRUTINY ASSESSMENT. IN THE COURSE OF THE ASSESSME NT PROCEEDINGS, THE AO INTER ALIA NOTICED THAT THE ASSESSEE HAS SOLD AN IMMOVABLE PROPERTY BEING NON-AGRICULTURAL (NA) LAND BEARING R S NO. 1719 SITUATED AT VILLAGE PANCHOT, DIST. MEHSANA, GUJARAT VIDE SALE DEED DATED 27.11.2014 HELD ALONGWITH OTHER FOUR CO-OWNER S AND THAT THE ASSESSEE IS HAVING 25% SHARE IN THE TOTAL CONSIDERA TION OF RS.12,30,49,800/-. THE SHARE OF ASSESSEE IN SALE C ONSIDERATION THUS WORKED OUT TO RS.3,07,62,451/-. THE AO DISPUTED TH E NATURE AND CHARACTER OF TRANSACTION DECLARED TO BE OF CAPITAL NATURE BY THE ASSESSEE. ACCORDING TO THE AO, THE PURCHASE AND SA LE OF LAND PARCELS BY THE ASSESSEE REQUIRES TO BE TREATED AS BUSINESS VENTURE AND THE PROFITS ARISING ON SALE OF LAND IS TAXABLE UNDER TH E HEAD BUSINESS INCOME RATHER THAN UNDER THE HEAD CAPITAL GAINS AS DECLARED BY THE ASSESSEE. 3.1 FOR HOLDING SO, THE AO TRAVERSED THROUGH THE WH OLE GAMUT OF SEQUENTIAL EVENTS FROM PURCHASE OF LAND PARCELS UP TO THE SALE POINT. IT WAS INTER ALIA NOTICED THAT THE LAND HAS BEEN PURCHASED BY THE ASSESSEE ALONGWITH OTHER CO-OWNERS DURING FY 2011-1 2 THROUGH FIVE DIFFERENT SALE DEEDS, ALL FALLING IN OLD REVENUE NO . 1724/2 SIM OF PANCHOT VILLAGE, MEHSANA. THE LAND SO PURCHASED HA D BEEN MERGED ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 3 - WITH NEW REVENUE SURVEY NO. 1719 AND SOLD TO THE PU RCHASER NAMELY M/S. AVENUE SUPER MARKET LTD. IT WAS OBSERVED THAT THE ASSESSEE HAS PURCHASED THE FIVE DIFFERENT LAND PARCELS BETWEEN 1 6.09.2011 TO 30.10.2012. THE AO TABULATED THE TRANSACTION DETAI LS AND OBSERVED THAT THE ASSESSEE ALONGWITH OTHER CO-HOLDERS GOT TH E LAY OUT PLAN APPROVED FROM THE COMPETENT AUTHORITY INITIALLY FOR PLOTTING OF LAND AND SUBSEQUENTLY TO BUILD RESIDENTIAL BLOCKS WITH S MALL BUSINESS CENTRE AND FINALLY RESIDENTIAL BLOCKS WITH COMMERCIAL UNIT S. THE LAY OUT PLANS WERE SIGNED BY THE ASSESSEE AND OTHER CO-HOLD ERS AND THE APPLICATION FOR CHANGE OF LAND USER WAS SIGNED BY N ARENDRA PATEL ON BEHALF OF ALL THE CO-HOLDERS OF NEW RS NO. 1719. I T WAS NOTED BY THE AO THAT SEQUENTIAL ACTION SUCH AS PURCHASE OF ADJOI NING LANDS AND MERGER OF THE LAND INTO NEW RS NO., GETTING LAY OUT PLAN APPROVED AND MAKING APPLICATION FOR FREQUENT CHANGE IN LAND USE INDICATED THE UNDERLYING INTENTION OF THE ASSESSEE TO DO BUSINESS OF LAND DEVELOPMENT. THE AO NOTED THAT THE LAND WAS CONVERT ED TO NA LAND AFTER ITS PURCHASE FOR RESIDENTIAL PURPOSE VIDE ORD ER DATED 15.07.2013. THE LAND USE WAS THEREAFTER REVISED FOR SMALL BUSIN ESS CENTRE VIDE ORDER DATED 06.02.2014. THEREAFTER, THE PURPOSE OF LAND USE WAS AGAIN MODIFIED AND CONVERTED FOR COMMERCIAL USE VIDE ORDE R DATED 19.09.2014. AN APPLICATION FOR REVISION OF LAND US E FOR COMMERCIAL PURPOSE WAS MADE ON 19.08.2014. THE ASSESSEE THERE AFTER ENTERED INTO A PACT WITH PROPOSED BUYER M/S. AVENUE SUPER MARKET LTD AND RECEIVED FIRST INSTALLMENT OF SALE PRICE ON 12.09.2 014. THE AO THUS OBSERVED THAT HE PURCHASE OF PLOTS OF DIFFERENT SUR VEY NUMBERS ADJOINING TO EACH OTHER ON DIFFERENT DATES AND CLUB BING/MERGING THEM IN SINGLE SURVEY NUMBER, CONVERSION OF LAND INITIAL LY INTO NA FOR RESIDENTIAL PURPOSE AND THEN FOR SMALL BUSINESS CEN TRE PURPOSE AND FINALLY FOR COMMERCIAL PURPOSE CLEARLY INDICATE THA T THE LAND WAS PURCHASED AND SOLD EXCLUSIVELY KEEPING IN MIND THE DYNAMICS OF BUSINESS AND SUCH VENTURE IS AKIN TO BUSINESS AS DE FINED UNDER S.2(13) ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 4 - OF THE ACT. THE AO OBSERVED FROM THE REGISTERED SA LE DEED THAT THE ENTIRE ACT OF THE ASSESSEE WAS TO PROVIDE POSSESSIO N OF LAND WITH READY COMMERCIAL USE TO THE BUYER TO ENABLE IT TO CONSTRU CT THE MALL. IT WAS THUS INFERRED THAT ALL SERIES OF ACT ARE PURELY BUS INESS ORIENTED AND THEREFORE, THE PROFITS ARISING ON SALE OF LAND IS R EQUIRED TO BE TREATED AS BUSINESS INCOME. THE AO INCIDENTALLY ALSO NOTI CED THAT THE INITIAL BANAKHAT AMOUNT OF RS.21 LAKHS WAS RECEIVED FROM TH E BUYER AFTER APPLICATION FOR MODIFICATION IN LAND USE PLAN FOR C OMMERCIAL PURPOSES WAS MOVED AND THEREFORE THE ASSESSEE WAS UNDER NO C OMPULSION TO ACT ON BEHEST OF THE PROPOSED BUYER AS CLAIMED. THE AO INFERRED THE MERGER AND CHANGE OF LAND USE PLAN THRICE ADVERSE T O THE ASSESSEE AND AN INDICATION OF BUSINESS LEANING FOR EXPLOITATION OF LAND. THE AO ALSO NOTED THAT THE ASSESSEE HAS DERIVED EXTRAORDINARY P ROFITS IN A SHORT TIME HORIZON WHICH ALSO SUGGESTS THE ELEMENT OF COM MERCIALITY IN THE ACT OF THE ASSESSEE. THE AO ACCORDINGLY TREATED TH E AMOUNT OF RS.2,97,02,410/- TO BE BUSINESS INCOME OF THE ASS ESSEE ARISING FROM SUCH LAND SALE WHICH IS SUSCEPTIBLE TO TAXATION UND ER THE HEAD BUSINESS INCOME. THE AO ACCORDINGLY DENIED THE C ONCESSIONAL TAX TREATMENT AVAILABLE TO THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS AND ALSO DENIED THE DEDUCTIONS AND BENEFITS AVAILABLE TO CAPITAL GAINS. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE CIT(A) TOOK NOTE OF VARIOUS SUBMISSIONS MADE BY THE ASSESSEE BUT HOWEVER DID NOT FIND ANY MERIT IN THE CASE OF THE A SSESSEE. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) IS REPRODUCED HEREUNDER: I HAVE CONSIDERED THE FACTS OF THE CASE, PERUSED T HE ASSESSMENT ORDER AND THE WRITTEN SUBMISSIONS MADE BY THE APPELLANT. THE FACTS OF THE CASE ARE SUMMARIZED AS UNDER:- 1) THE APPELLANT HAS DECLARED SHORT TERM CAPITAL GA IN OF RS. 1,36,21,351/- IN THE RETURN OF INCOME WHICH HAS ARI SEN OUT OF SALE ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 5 - OF THE LAND AT REVENUE SURVEY NO.1.719 SIM OF PANCH OT, MEHSANA WHICH WAS SOLD ON 27.11.2014 THROUGH SALE DEED NO.MSN/10750/2014 FOR THE TOTAL SALE CONSIDERATION OF RS.12,30,49,800/- IN WHICH THE APPELLANT HAD SHARE OF 25%. THE SAID LAND HAS BEEN PURCHASED BY THE CO-OWNERS DURIN G THE FY 2011- 12 THROUGH FIVE DIFFERENT SALE DEEDS, ALL FALLING I N OLD REVENUE NO.1724/2 OF SIM OF PANCHOT VILLAGE, MEHSANA. THE L AND SO PURCHASED HAD BEEN MERGED WITH NEW REVENUE SURVEY N O.1719 AND SOLD TO M/S AVENUE SUPER MARKET LTD. 2) THE APPELLANT ALONG WITH OTHER CO-OWNERS GOT THI S LAND APPROVED FOR RESIDENTIAL PURPOSES FOR WHICH THE FIRST PLAN W AS APPROVED ON 05.08.2013 AND REVISED PLAN ON 06.02.2014 FOR CONVE RTING THE LAND FOR RESIDENTIAL AND SMALL BUSINESS CENTRE AND LASTL Y ON 15.09.2014 FOR CONVERTING THE ENTIRE PLOT OF LAND FOR COMMERCI AL PURPOSE ONLY. THE A.O. HAS TAKEN THE STAND THAT THE PURCHAS ING OF LAND IN 5 PIECES, MERGING OF THE LAND INTO NEW REVENUE NUMB ER AND CONVERTING THE SAME FROM RESIDENTIAL TO COMMERCIAL PURPOSES BY MAKING THREE DIFFERENT APPLICATIONS, IS AN ADVENTUR E IN NATURE OF BUSINESS. 3) BEFORE ARRIVING AT THIS CONCLUSION, THE A.O. ISS UED A DETAILED SHOW CAUSE NOTICE DATED 10.11.2017 WHICH HAS BEEN REPROD UCED IN THE ASSESSMENT ORDER ITSELF. FURTHER, THE APPELLANT HAS FILED THE REPLY VIDE HIS LETTER DATED 04.12.2017 WHICH HAS ALSO BEE N REPRODUCED IN THE ASSESSMENT ORDER ITSELF. THE A.O. CONSIDERED TH E SUBMISSIONS AND REJECTED THEM FOR THE REASONS ASSIGNED IN PARA 3.2 OF THE ASSESSMENT ORDER MAINLY HOLDING THAT THE APPELLANT INTENDED TO GAIN MAXIMUM PROFIT ON SALE OF THE PIECE OF LAND, THE CL AIM THAT THE CONVERSION OF LAND WAS AS PER BUYER'S REQUEST WAS F OUND INCORRECT, ETC. HE ULTIMATELY HELD THAT THE SALE OF LAND IS AN ADVENTURE IN NATURE AS DEFINED IN SECTION 2(13) OF THE ACT AND T HEREFORE, THE PROFIT ON SALE OF THE LAND AS REQUIRED TO BE TAXED U/5.28 OF THE ACT. 4) THE APPELLANT HAS CONTENDED THAT THE APPELLANT ALONG WITH OTHER CO- OWNERS HAD FULFILLED THE DEMAND OF THE BUYER OF THE LAND FOR GETTING THE NECESSARY PERMISSIONS FOR WHICH CORRESPONDENCE WAS MADE THROUGH EMAIL ON 13.08.2014 AND 18.08.2014 WHEREIN SMALL LAYOUT PLANS WERE PROVIDED BY THE BUYER OF THE LAND. THE A PPELLANT ALSO OBJECTED TO THE PROPOSITION PUT FORTH BY THE AO THA T THE INTENTION OF THE APPELLANT WAS BUSINESS ONLY FOR THE REASON THAT HE APPLIED FOR N.A. ON 19.12.2012 AND SECOND ONE ON 04.04.2013 AND ALSO THE A.O/S FINDING THAT SOME EXPENSES HAD BEEN INCURRED FOR GETTING THE LAND CONVERTED INTO N.A. AND THE APPELLANT CONTENDE D THAT THE SAID EXPENSES WERE ON ACCOUNT OF PAYMENT OF BROKERAGE FO R THE SALE OF LAND ONLY. THE EXPENSES FOR APPROVING THE LAY OUT P LAN WERE ALSO COMPULSORY AND BASED ON THE AGREEMENT MADE WITH THE BUYER OF LAND, FOR WHICH A COPY OF AGREEMENT HAS ALSO BEEN F ILED WITH THE WRITTEN SUBMISSIONS. THE APPELLANT HAS ALSO CONTEND ED THAT HE DID NOT ENTER INTO FREQUENT SALE AND PURCHASE OF LANDS IN THE PAST AND THIS WAS THE ONLY SINGLE LAND TRANSACTION SOLD TO O NE PARTY, THE APPELLANT DID NOT CARRY OUT ANY ACTIVITY OF LAND DE VELOPMENT ON THE SAID LAND BY WAY OF EARTH FILLING, CONSTRUCTION OF BOUNDARY WALL, ETC. , THE ASSET WAS NOT SHOWN AS STOCK IN TRADE IN THE BOOKS OF ACCOUNTS OF THE APPELLANT, THE BUSINESS OF THE APPE LLANT IS ONLY OF ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 6 - FINANCE, NO SERIES OF TRANSACTIONS SO AS TO CONSTIT UTE A BUSINESS ACTIVITY, ETC. 5) THE APPELLANT HAS RELIED ON THE DECISION OF HO NLDLE ITAT, AHMEDABAD IN THE CASE OF SHRI AJITKUMAR T. PATEL VS . DCIT FOR A.Y.2008-09 IN ITA N0.826/AHD/2010, DEEPCHAND & CO. VS. CTT(107-ITR-716(ALLAHABAD HIGH COURT, CIT VS. REWAS HANKER A. KOTHARI (2006) 155 TAXMANN 214 (GUJARAT HIGH COURT, JANKIRAM BAHADUR RAM(1965) 57 ITR 21 (SUPREME COURT) WHICH A LL HAVE BEEN REPRODUCED IN THE CASE OF SHRI AJITKUMAR T. PA TEL(SUPRA). ON THE STRENGTH OF THE CONTENTIONS WITH JUDICIAL CITAT IONS, THE APPELLANT STATED THAT THE TRANSACTION OF PURCHASE AND SALE OF LAND SHOULD NOT BE CONSIDERED AS ADVENTURE IN THE NATURE OF BUSINES S AND THE CAPITAL GAIN AS DECLARED IN THE RETURN OF INCOME BE ACCEPTED AND THE AO'S FINDING IN THIS REGARD BE REVERSED. 6.1 SINCE THE AO HAS REFERRED TO DEFINITION AS PROV IDED IN SECTION 2(13) OF THE ACT, THE ISSUE IS REQUIRED TO BE EXAMINED WI TH REFERENCE TO THIS DEFINITION. AS PER THE DEFINITION OF SECTION 2(13) OF THE ACT, THE TERM 'BUSINESS' IS DEFINED AS UNDER- 'BUSINESS INCLUDES ANY TRADE, COMMERCE OR MANUFACTU RE OF ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMER CE OR MANUFACTURE' 6.2 FURTHER, THERE IS NO DEFINITION OF 'ADVENTURE O R CONCERN IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE' IN THE IN COME-TAX ACT. THEREFORE, VARIOUS JUDICIAL PRONOUNCEMENTS ON THE S UBJECT HAVE TO BE REFERRED. SINCE THE APPELLANT HAS RELIED ON THE DEC ISION IN THE CASE OF SHRI AJITKUMAR T. PATEL, THE SAME HAS BEEN CAREFULLY PER USED. FURTHER, THERE ARE TWO MORE DECISIONS AT HAND, ONE IS IN THE CASE OF [2018] 89 TAXMANN.COM (KERALA HIGH COURT) RENDERED IN THE CAS E OF V.A, JOSE VS. DOT, CENTRAL CIRCLE, THRISSUR AND ANOTHER IS [2016] 74 TAXMANN.COM 12 DELIVERED BY THE HAT, PUNE IN THE CASE OF DILIP BAT TU KARANJULE VS., ITO, PUNE. (BOTH IN FAVOUR OF REVENUE). FURTHER, IN THE CASE OF PARI MANGALDAS GIRDHARDAS V. CIT 197 CTR (GUJ.) 647, AFTER ANALYZI NG VARIOUS DECISIONS OF APEX COURT, THE HON'BLE HIGH COURT OF GUJARAT HA S FORMULATED CERTAIN TESTS TO DETERMINE AS TO WHETHER AN ASSESSEE CAN BE SAID TO BE 'CARRYING ON BUSINESS IN THEIR DECISION IN THE CASE OF CIT VS . REVASHANKER A KOTHARI (2006) 155 TAXMAN 214 (GUJARAT) WHICH ARE AS UNDER: - (A) THE FIRST TEST IS WHETHER THE INITIAL ACQUISITION OF THE SUBJECT- MATTER OF TRANSACTION WAS WITH THE INTENTION OF DEALING IN THE ITEM OR WITH A VIEW TO FINDING AN INVESTMENT. IF THE TRANSACTION , SINCE THE INCEPTION, APPEARS TO BE IMPRESSED WITH THE CHARACT ER OF A COMMERCIAL TRANSACTION ENTERED INTO WITH A VIEW TO EARN PROFIT, IT WOULD FURNISH A VALUABLE GUIDELINE. (B) THE SECOND TEST THAT IS OFTEN APPLIED IS AS TO WHY AND HOW AND FOR WHAT PURPOSE THE SALE WAS EFFECTED SUBSEQUENTLY. (C) THE THIRD TEST WHICH IS FREQUENTLY APPLIED, IS AS TO HOW THE ASSE SSEE DEALT WITH THE SUBJECT-MATTER OF TRANSACTION DURING THE TIME THE ASSET WAS WITH THE ASSESSEE. HAS IT BEEN TREATED AS STOCK-IN-TRADE ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 7 - OR HAS IT BEEN SHOWN IN THE BOOKS OF ACCOUNT AND BA LANCE SHEET AS AN INVESTMENT. THIS INQUIRY, THOUGH RELEVANT, IS NO T CONCLUSIVE. (D) THE FOURTH TEST IS AS TO HOW THE ASSESSEE HIMSELF HAS RETURNED THE INCOME FROM SUCH ACTIVITIES AND HOW THE DEPARTMENT HAS DEALT WITH THE SAME IN THE COURSE OF PRECEDING AND SUCCEEDING ASSESSMENTS. THIS FACTOR, THOUGH NOT CONCLUSIVE, CAN AFFORD GOOD AND COGENT EVIDENCE TO JUDGE THE NATURE OF TRANSACTION AND WOU LD BE A RELEVANT CIRCUMSTANCE TO BE CONSIDERED IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION. (E) THE FIFTH TEST , NORMALLY APPLIED IN CASES OF PARTNERSHIP FIRMS AN D COMPANIES, IS WHETHER THE DEED OF PARTNERSHIP OR TH E MEMORANDUM OF ASSOCIATION, AS THE CASE MAY BE, AUTHORISES SUCH AN ACTIVITY. (F) THE LAST BUT NOT THE LEAST, RATHER THE MOST IMPORTA NT TEST , IS AS TO THE VOLUME, FREQUENCY, CONTINUITY AND REGULARITY OF TRANSACTIONS OF PURCHASE AND SALE OF THE GOODS CONCERNED. IN A CASE WHERE THERE IS REPETITION AND CONTINUITY, COUPLED WITH THE MAGNITU DE OF THE TRANSACTION, BEARING REASONABLE PROPORTION TO THE S TRENGTH OF HOLDING, THEN AN INFERENCE CAN READILY BE DRAWN THA T THE ACTIVITY IS IN THE NATURE OF BUSINESS ON FOLLOWING PARAMETERS: - A) WHETHER THE SELLER OF THE LAND WAS HOLDING THE L AND FOR THE LONG TIME OR RECEIVED THROUGH INHERITANCE FROM FORE FATHER AND HE HIMSELF WAS DOING ANY AGRICULTURAL ACTIVITIE S ON THIS LAND OR NOT? B) WHETHER THE SELLER OF THE LAND WAS LEGALLY OBLIG ED BY THE PURCHASER BY PROVIDING FINANCE IN THE FORM OF ADVAN CE MONEY FOR THE PURCHASE OF LAND INTENDED TO BE SOLD TO THE PURCHASER? C) WHETHER THE PURCHASE OF LAND WAS WITH AN INTEN TION TO HOLD THE SAME FOR THE LONGER PERIOD AND IN THE SAME STAT US QUO OR ANY DEVELOPMENT OF LAND WAS TO BE MADE SUCH AS SOIL FILLING (LEVELING WORK), OBTAINING PERMISSIONS FOR THE PURP OSES OF CONSTRUCTION OF BUILDINGS EITHER FOR RESIDENTIAL OR COMMERCIAL PURPOSES? D) WHETHER THE SELLER HAD MADE ANY AGREEMENT BEFORE SELLING OF THE LAND WITH THE PURCHASER FOR CARRYING OUT ANY DE VELOPMENT WORK ON THE SAID LAND WITH MUTUAL CONSENTS AND THRO UGH LEGAL AGREEMENTS AND BEARING OF THE EXPENSES BY THE PURCHASER? E) WHETHER THE PURCHASER IMPOSED CERTAIN CONDITION S ON THE SELLER FOR CARRYING OUT THE OBLIGATIONS CAST ON THE SELLER OR NOT AND IF SO, WHETHER THEY ARE LINKED WITH THE PAY MENTS TOWARDS PURCHASE COST BY THE PURCHASER? F) WHETHER ANY AGREEMENT TO SALE HAS BEEN MADE AN D THE PAYMENTS HAD BEEN RECEIVED BY THE SELLERS SETTING C ERTAIN CONDITIONS OF DEVELOPMENT OF LAND OR NOT? 6.3 FIRST THE TESTS APPLIED IN THE CASE OF AJITKUMA R T PATEL (NON- REPORTED CASE OF ITAT, AHMEDABAD) HAVE BEEN PERUSED AND IT HAS BEEN NOTICED THAT IN THAT CASE, THE APPLICANT BEFORE THE HON'BLE ITAT THE FACTS HAVE BEEN SUMMARIZED AS UNDER:- ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 8 - A) THE APPLICANT WAS A DIRECTOR IN SEVERAL COMPANI ES AND DISCLOSED SALARY INCOME, DIVIDEND INCOME AND INCOME FROM OTHER SOURCES. B) HE PURCHASED THE TWO PLOTS OF AGRICULTURAL L AND ON 28.02.2005 AND 14.02.2005 WHICH WERE CONSOLIDATED O N 16.05.2005. C) THE APPLICATION FOR TRANSFER OF AGRICULTURAL LAND TO COMMERCIAL PURPOSE LAND (NA LAND) WAS MADE ON 17.07 .2007 AND CONVERSION FEES AND OTHER CHARGES WERE PAID BY THE APPLICANT. D) FINAL ORDER WAS PASSED BY THE AUDA AFTER DED UCTION OF 20% AND 40% AS PER ORDER DATED 24.07.2007 AND THERE WAS SOME COMMERCIAL LOSS IN TERMS OF LAND AREA ON ACCOUNT OF DEDUCTION. E) THESE TWO PLOTS OF LAND WERE SOLD ON 23.08.2007 TO ONE URBANEDGED HOTELS PVT. LTD. AFTER RETAINING THE SAI D PLOTS OF LAND FOR ABOUT 2 YEARS AND SOLD. F) THE A.O. OBSERVED THAT INVESTMENT IN THE PUR CHASE OF PLOTS FROM OWN FUNDS DID NOT HAVE ANY BEARING ON CARRYING OUT OF BUSINESS OR INVESTMENT, THE APPLICANT TOOK FURTHER STEPS FOR CONVERSION OF LAND INTO N.A. (COMMERCIAL PURPOSES), PAYMENT OF WT DID NOT HAVE ANY BEARING ON INVESTMENT, SINGL E TRANSACTION CAN ALSO BE TREATED AS BUSINESS TRANSAC TION, AND THE INTENTION OF THE APPLICANT WAS TO EARN THE PROF IT BY SELLING THE DEVELOPED LANDS ETC. G) THE HON'BLE TRIBUNAL DECIDED THE ISSUE IN FAVO UR OF THE APPLICANT WITH THE FOLLOWING OBSERVATIONS:- '11. IN THE LIGHT OF THE DETAILED FOREGOING DISCUSS ION AND ON CONSIDERATION OF THE EVIDENCES PLACED ON RECORD AS WELL AS IN VIEW OF THE LEGAL PROPOSITIONS LAID DOWN BY T HE HON FILE COURTS, WE HEREBY HOLD THAT THE ASSET IN QUESTION W AS NOT PURCHASED WITH THE OBJECT TO ENTER INTO THE TRADE O F LAND- DEALING; BECAUSE AFTER THIS TRANSACTION OR BEFORE T HIS TRANSACTION THERE WAS NO EVIDENCE OF ANY SUCH ACTIV ITY EVER CARRIED OUT BY THE ASSESSEE. WE HAVE PERUSED THE EX PENSES INCURRED BY THE ASSESSEE AND THE NATURE OF THOSE EX PENSES ARE MAINLY TOWARDS PAYMENT OF LEGAL CHARGE, OR PRES CRIBED FEES FOR CONSOLIDATION OF THE PLOTS OR FOR THE CONV ERSION OF THE AGRICULTURAL LAND INTO NON-AGRICULTURAL LAND. C OMMONLY KNOWN FACT IS THAT IN A LAND TRADE, GENERALLY THE L AND IS PARCELED OUT INTO SMALL PLOTS AND THEREAFTER MARKET ED. SUCH AN ACTIVITY HAS NOT BEEN CARRIED BY THE ASSESSEE. E VEN THERE WAS NO SYSTEMATIC OR REPETITIVE BUYING OR SELLING O F LAND WHICH COULD INDICATE AN ADVENTURE IN THE NATURE OF TRADE. FEW STEPS TAKEN BY THIS ASSESSEE MIGHT BE AN ATTEMP T TO RECEIVE HIGHER PRICE OF LAND BUT MERELY BECAUSE OF THESE STEPS, IT CANNOT BE HELD THAT THE APPELLANT IS DEAL ING IN LAND ESTATE BUSINESS. THE LAND IN QUESTION WAS NEVER TRE ATED AS STOCK IN TRADE BUT IT WAS TREATED AS CAPITAL ASSET ON WHICH WEALTH-TAX WAS PAID ALL THE CIRCUMSTANCES AND EVIDE NCES THUS DEMONSTRATED THE PURPOSE OF PURCHASE OF LAND A ND THE OBJECTIVE OF THE ASSESSEE FOR WHICH THE LAND WAS AC QUIRED WHICH BY NO MEANS CAN BE HELD AN ADVENTURE IN THE N ATURE OF TRADE. WE, THEREFORE, HOLD THAT THE APPELLANT HAS N OT ENTERED ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 9 - INTO ANY ADVENTURE IN THE NATURE OF TRADE AND THE CONSIDERATION RECEIVED ON THE SAID LAND TRANSACTION WAS IN THE NATURE OF CAPITAL GAIN ONLY, RESULTANTLY, GROUN D NO.1 GOES IN FAVOUR OF THE ASSESSEE.' 6.4 IF THE FACTS OF THE APPELLANT'S CASE ARE COMPAR ED WITH THE FACTS AS BROUGHT OUT IN THE CASE OF SHRI AJITKUMAR T. PATEL, THE MAJORITY OF THE TESTS FAIL IN THE CASE OF THE APPELLANT. THESE FACT S ARE DISTINGUISHED AS UNDER: - SR. NO. APPELLANTS CASE CASE OF AJITKUMAR T. PATEL 1. THE SAID LAND HAS BEEN PURCHASED BY THE CO-OWNERS DURING THE FY 2011-12 THROUGH FIVE DIFFERENT SALE DEEDS, ALL FALLING IN OLD REVENUE NO. 1724/2 OF SIM OF PANCHOT VILLAGE, MEHSANA. THE LAND SO PURCHASED HAD BEEN('MERGED,, WITH NEW REVENUE SURVEY NO.1719 AND SOLD TO M/S AVENUE SUPER MARKET LTD. HE PURCHASED THE TWO PLOTS OF AGRICULTURAL LAND ON 28.02.2005 AND 14.02.2005 WHICH WERE CONSOLIDATED ON 16.05.2005. 2. THE APPELLANT ALONG WITH OTHER CO-OWNERS GOT THIS LAND APPROVED FOR RESIDENTIAL PURPOSES FOR WHICH THE FIRST PLAN WAS APPROVED ON 05.08.2013 AND THE REVISED PLAN ON 06.02.2014 FOR CONVERTING THE LAND FOR RESIDENTIAL AND SMALL BUSINESS CENTRE AND LASTLY ON 15.09.2014 FOR CONVERTING THE ENTIRE PLOT OF LAND FOR COMMERCIAL PURPOSE ONLY. THE APPLICATION FOR TRANSFER OF AGRICULTURAL LAND TO COMMERCIAL PURPOSE LAND (NA LAND) WAS MADE ON 17.07.2007 AND CONVERSION FEES AND OTHER CHARGES WERE PAID BY THE APPLICANT. 3. NO SUCH DEDUCTION HAS BEEN MADE AS THE LAND WAS NOT FALLING IN ANY OF THE URBAN DEVELOPMENT AUTHORITY. FINAL ORDER WAS PASSED BY THE AUDA AFTER DEDUCTION OF 20% AND 40% AS PER ORDER DATED 24.07.2007 AND THERE WAS SOME COMMERCIAL LOSS IN TERMS OF LAND AREA ON ACCOUNT OF DEDUCTION. 4. THE SAID LANDS WERE HELD FOR THE PERIOD COMMENCING FROM 16.09.2011 IN RESPECT OF FIRST THREE PLOTS (FROM 30.12.2012 TO 11.09,2014) WHICH IS LESS THAN 3 YEARS AND 22 MONTHS IN RESPECT OF OTHER TWO PLOTS. THESE TWO PLOTS OF LAND WERE SOLD ON 23.08.2007 TO ONE URBANEDGED HOTELS PVT. LTD. AFTER RETAINING THE SAID PLOTS OF LAND FOR ABOUT 2VZ YEARS AND SOLD. 5. THERE WAS MOD BETWEEN THE PURCHASING PARTY AND SELLING PARTY FOR PROVIDING THE FINANCE FOR VARIOUS PROCESSES SO THAT THE LAND CAN BE USED FOR COMMERCIAL PURPOSE. THE BUYER WAS PREDETERMINED WITH WHOM CORRESPONDENCE THROUGH EMAIL AND SUBSEQUENT MOU MADE. NO SUCH MQU WAS MADE AND ALL THE EXPENSES WERE BORNE BY THE APPLICANT HIMSELF BEFORE SELLING OF THE LAND AND THE BUYER WAS NOT PREDETERMINED. 6. NO WEALTH-TAX WAS PAID FOR THE PERIOD OF HOLDING OF LAND AND NO PERSONAL ACCOUNTS WERE PREPARED OR SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS EXHIBITING THAT THE LANDS WERE TREATED AS CAPITAL ASSETS. WEALTH-TAX HAS BEEN PAID AND THE ASSET IS REFLECTED AS CAPITAL ASSET. SINCE THE FACTS OF THE APPELLANT'S CASE ARE DISTING UISHABLE FROM THE FACTS OF SHRI AJITKUMAR T. PATEL(SUPRA), THE DECISI ONS IN THE CASE OF [2018] 89 TAXMANN.COM2 (KERALA HIGH COURT) RENDERED IN THE CASE OF ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 10 - V.A. JOSE VS. DCIT, CENTRAL CIRCLE, THRISSUR AND [2 016] 74 TAXANN.COM 12 DELIVERED BY THE ITAT, PUNE IN THE CASE OF DILIP BATTU KARANJULE VS., ITO, PUNE HAVE BEEN EXAMINED AND FOUND THAT THE FAC TS REPORTED IN BOTH THESE CASES ARE QUITE SIMILAR TO THE FACTS OF THE A PPELLANT'S CASE. IN THE CASE OF SHRI V.A. JOSE, THE HON'BLE TRIBUNAL HELD A S UNDER:- A) THE ASSESSES PURCHASED A PIECE OF LAND ON 16-8-2 006. AFTER LEVELING THE LAND, HE ENTERED INTO AN AGREEMENT FOR SALE OF THE SAID PROPERTY TO T AND SALE WAS CONCLUDED IN YEAR 2008. B) THE ASSESSING OFFICER DISREGARDING THE OBJECTION OF THE ASSESSEE SEEKING EXEMPTION FROM TAXATION ON THE GRO UND THAT IT WAS AN AGRICULTURAL LAND, OPINED THAT NO AGRICUL TURAL ACTIVITIES HAD TAKEN PLACE ON THE LAND. IT WAS PURC HASED IN YEAR 2006 AND AFTER LEVELING, IT WAS SOLD IN YEAR 2 008. SOON AFTER THE PURCHASE, THE ASSESSEE HAD LEFT FOR SAUDI ARABIA AND HE COULD NOT HAVE DONE ANY AGRICULTURAL ACTIVIT Y, BEING A NON-RESIDENT INDIAN (NRI) WITHOUT OBTAINING PERMISS ION OF RBI UNDER FOREIGN EXCHANGE MANAGEMENT (ACQUISITION & TRANSFER OF IMMOVABLE PROPERTY IN INDIA) REGULATION S, 2000. THE ASSESSING OFFICER THUS HELD THAT THE TRANSACTIO N WAS 'ADVENTURE IN THE NATURE OF TRADE' AND ACCORDINGLY BROUGHT TO TAX INCOME IN QUESTION UNDER THE HEAD 'INCOME FR OM BUSINESS'. THE TRIBUNAL UPHELD THE ORDER OF ASSESSING OFFICER: HELD THE QUESTION OF LAW ARISING IN THIS APPEAL IS WHETH ER THE SALE CONSIDERATION WAS LIABLE TO BE TREATED AS BUSINESS INCOME OF THE ASSESSEE UNDER SECTION 28 OR WHETHER BEING THE SALE OF AN AGRICULTURAL LAND, HE WAS ENTITLED TO BE EXEMPTED F ROM CAPITAL GAINS TAX UNDER SECTION 45. [PARA 5] IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAD PURC HASED AGRICULTURAL LAND ON 16-8-2006 WHILE HE WAS STILL A NONRESIDENT INDIAN AND THEREAFTER HE DID NOT DO ANY AGRICULTURAL OPERATIONS ON THAT LAND. AFTER RETAINI NG IT FOR ABOUT TWO YEARS, HE SOLD IT TO T, IN THE MEANWHILE, HE HAD ALSO LEVELED THE LAND. ADMITTEDLY, HE DID NOT OBTAI N THE PERMISSION OF THE RBI UNDER RULE 47 OF THE FOREIGN EXCHANGE MANAGEMENT (ACQUISITION & TRANSFER OF IMMOVABLE PRO PERTY IN INDIA) REGULATIONS, 2000, WHICH PROHIBITS ACQUIS ITION OF AGRICULTURAL LAND BY AN NRI. THE FACT THAT HE HAD LEVELED THE LAND AND ENHANCED ITS SALEABILITY WAS ALSO AN INDICATION OF HIS INTENTION TO RESELL THE LAND EVEN WHEN HE PURCHASED IT. HE HAD MADE HUG E PROFITS CONSEQUENT TO THE SALE AND THEREFORE UNDOUB TEDLY THE TRANSACTION AMOUNTS TO 'ADVENTURE IN THE NATURE OF TRADE'. THE PROFIT WHICH HE MADE OUT OF THIS SALE WOULD THE REFORE BE CHARGEABLE TO TAX UNDER THE HEAD 'INCOME FROM BUSIN ESS'. THERE IS NO INFIRMITY, WHATSOEVER, IN THE ORDERS OF ASSESSMENT CONFIRMED BY THE TWO APPELLATE FORUMS, W HICH HAD ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 11 - CONSIDERED ITS VALIDITY. CONSEQUENTLY, THE APPEAL F AILS AND IT IS DISMISSED. [PARA 6] JUDGMENT ASHOK MENON, J. - THIS APPEAL ARISES FROM ITA NO.484/COCH/2013 ON THE FILE OF THE INCOME TAX APPE LLATE TRIBUNAL, COCHIN BENCH DATED 14-11-2014. APPELLANT CHALLENGES THE CONCURRENT FINDINGS OF THE FIRST APP ELLATE AUTHORITY AND THE TRIBUNAL CONFIRMING THE FINDINGS OF THE ASSESSING AUTHORITY. THE APPELLANT IS A NON-RESIDEN T INDIAN, WHO FILED THE REPORT OF INCOME ON 11-05-2010 FOR TH E ASSESSMENT YEAR 2009-2010 IN RESPONSE TO THE NOTICE DATED 18-02-2010 UNDER SECTION 142(1) OF INCOME TAX ACT ( THE ACT' FOR BREVITY). THE NOTICE WAS ONE ISSUED BY THE RESPONDENT IN PURSUANCE TO A SEARCH OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT. IT WAS REVEALED THAT THE PETITIONER HAD PURCHASED 1 ACRE AND 64.75 CENTS OF LAND AT A VINISSERY VILLAGE ON 16-08-2006 FOR A SUM OF RS.7,3 9,200/- (INCLUSIVE OF DOCUMENTATION CHARGES), AND AFTER LEV ELLING THE LAND, HE ENTERED INTO AN AGREEMENT FOR SALE OF THE SAID PROPERTY TO ONE SALGUNAN OF THRISSUR ON 22-08-2007 FOR RS.63,96,000/-. HE RECEIVED AN ADVANCE OF RS.25,00, 000/- AS PER THE AGREEMENT AND FINALLY SOLD IT TO M/S ST.ANT ONY'S TIMBER DEPOT ON 20-08-2008. 2. THE ASSESSING OFFICER DISREGARDING THE OBJECTION O F THE ASSESSEE SEEKING EXEMPTION FROM TAXATION ON THE GRO UND THAT IT IS AN AGRICULTURAL LAND, OPINED THAT NO AGRICULT URAL ACTIVITIES HAVE TAKEN PLACE ON THE LAND. IT WAS PUR CHASED IN 2006 AND AFTER LEVELING, IT WAS SOLD IN 2008. SOON AFTER THE PURCHASE, THE ASSESSEE HAD LEFT FOR SAUDI ARABIA AN D HE COULD NOT HAVE DONE ANY AGRICULTURAL ACTIVITY, BEIN G A NON- RESIDENT INDIAN (NRI) WITHOUT OBTAINING PERMISSION OF RBI UNDER FOREIGN EXCHANGE MANAGEMENT (ACQUISITION & TRANSFER OF IMMOVABLE PROPERTY IN INDIA) REGULATION , 2000. THE ASSESSING OFFICER HELD THAT THE TRANSACTION WAS 'ADVENTURE IN THE NATURE OF TRADE' AND ACCORDINGLY BROUGHT TO TAX THE PROPERTY UNDER THE HEAD 'INCOME FROM BUS INESS' AND DETERMINED THE TOTAL INCOME OF THE APPELLANT AT RS.56,19,593/- APART FROM THE AGRICULTURAL INCOME R ETURN OF RS.28,17,500/- AS PER ANNEXURE A. AGGRIEVED BY THE ORDER, THE APPELLANT FILED JTA NO.345/10-11 BEFORE THE COMMISSIONER OF INCOME TAX(APPEALS)-I, KOCHI, WHO CONFIRMED THE ASSESSMENT AND DISMISSED THE APPEAL A S PER ANNEXURE B. THE APPELLANT CHALLENGED THE SAID ORDER BEFORE THE INCOME TAX APPELLATE TRIBUNAL, KOCHI BENCH AS I TA 484/COCH/2013 AND IT WAS ONCE AGAIN CONFIRMED THAT THE LAND IN QUESTION WAS INDISPUTABLY NOT AN AGRICULTUR AL LAND, AS PER ANNEXURE C. IT IS THIS FINDING, WHICH IS UND ER CHALLENGE. 3 . WE HEARD THE LEARNED COUNSEL FOR THE APPELLANT A ND THE COUNSEL APPEARING FOR GOVERNMENT OF INDIA (TAXES) A ND RECORDS WERE PERUSED. 4 . IT IS SUBMITTED BY THE LEARNED COUNSEL FOR THE AP PELLANT THAT THERE IS NO CAPITAL GAINS ACCRUED, AS DEFINED UNDER ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 12 - SECTION 45 OF THE INCOME TAX ACT. THE APPELLANT HAD PURCHASED AGRICULTURAL LAND AND RETAINED WITH INTEN TION TO CULTIVATE IT ON HIS RETURN FROM GULF, FOR GOOD. AGR ICULTURAL LAND IS EXCLUDED BY SUB-CLAUSE (HI) OF SUB-SECTION (14) OF SECTION 2, THE DEFINITION OF CAPITAL ASSET. IT IS F URTHER STATED THAT THE LAND STILL CONTINUES TO BE AN AGRICULTURAL PROPERTY. 5. THE QUESTION OF LAW ARISING IN THIS APPEAL IS WHET HER THE SALE CONSIDERATION WAS LIABLE TO BE TREATED AS BUSI NESS INCOME OF THE APPELLANT UNDER SECTION 28 OF THE ACT OR WHETHER BEING THE SALE OF AN AGRICULTURAL LAND, THE APPELLANT WAS ENTITLED TO BE EXEMPTED FROM CAPITAL GAINS TAX UNDER SECTION 45 OF THE ACT. 6 . IT IS AN UNDISPUTED FACT THAT THE APPELLANT HAD P URCHASED AGRICULTURAL LAND ON 16-08-2006 WHILE HE WAS STILL A NON- RESIDENT INDIAN AND THEREAFTER HE DID NOT DO ANY AG RICULTURAL OPERATIONS ON THAT LAND. AFTER RETAINING IT FOR ABO UT TWO YEARS, HE SOLD IT TO ST ANTONY'S TIMBER DEPOT, CHEV OOR. IN THE MEANWHILE, HE HAD ALSO LEVELLED THE LAND BY EXP ENDING A SUM OF RS.1,75,000/-, ADMITTEDLY, HE DID NOT OBTAIN THE PERMISSION OF THE RBI UNDER SECTION 47 OF THE FOREI GN EXCHANGE MANAGEMENT (ACQUISITION & TRANSFER OF IMMO VABLE PROPERTY IN INDIA) ACT, 1999, WHICH PROHIBITS ACQUI SITION OF AGRICULTURAL LAND BY AN NRI. THE FACT THAT HE HAD L EVELLED THE LAND AND ENHANCED ITS SALEABILITY IS ALSO AN IN DICATION OF HIS INTENTION TO RESELL THE LAND EVEN WHEN HE PURCH ASED IT. HE HAD MADE HUGE PROFITS CONSEQUENT TO THE SALE AND THEREFORE UNDOUBTEDLY THE TRANSACTION AMOUNTS TO 'A DVENTURE IN THE NATURE OF TRADE'. THE PROFIT WHICH HE MADE O UT OF THIS SALE WOULD THEREFORE BE CHARGEABLE TO TAX UNDER THE HEAD 'INCOME FROM BUSINESS'. WE DO NOT FIND ANY INFIRMIT Y, WHATSOEVER, IN THE ORDERS OF ASSESSMENT CONFIRMED B Y THE TWO APPELLATE FORUMS, WHICH HAD CONSIDERED ITS VALIDITY . CONSEQUENTLY, THE APPEAL FAILS AND IT IS DISMISSED. NO COSTS,' FURTHER, IN THE CASE OF DILIP BATTU(SUPRA), THE HON 'BLE TRIBUNAL HELD AS UNDER:- FACTS OF THE CASE:- A) THE ASSESSES WAS AN ADVOCATE BY PROFESSION. DURI NG RELEVANT YEAR UNDER CONSIDERATION THE ASSESSEE WAS FOUND TO HAVE SOLD IMMOVABLE PROPERTY (LAND) ON WHICH GAINS ARISING THEREFROM WERE NOT OFFERED FOR TAXATION. THE ASSESSEE CLAIMED THE GAINS ARISING FR OM SALE OF LANDS AS EXEMPT FROM TAX TAKING SHELTER OF SECTION 2(14) READ WITH SECTION 45. B) THE ASSESSING OFFICER OBSERVED THAT (I) THE LAN D WAS NOT PURCHASED WITH ANY INTENTION TO HOLD IT FOR CAP ITAL ACCRETION, ENJOYMENT AND OWN USE BUT WERE PURCHASED WITH THE SOLE MOTIVE OF EARNING HUGE PROFITS ON IMMEDIATE SALE THEREOF AS A TRADING ASSET, (II) MAJ OR PORTION OF THESE AGRICULTURAL LANDS WERE NOT USEFUL FOR CULTIVATION (HI) OCCUPATION OF ASSESSEE WAS NOT PRIMARILY OF AN AGRICULTURIST (IV) LAND WAS ACQUIRE D OUT OF BORROWED FUNDS. THUS, THE ASSESSING OFFICER CONCLUDED THAT ENTIRE ACTIVITY OF PURCHASE AND ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 13 - IMMEDIATE SALE OF LAND BY THE ASSESSES FALLS WITHIN THE DOMAIN OF 'ADVENTURE IN NATURE OF TRADE'. HE ACCORDINGLY TREATED THE PROFIT RELATABLE TO ASSESSE E ARISING ON SALE OF LAND AS 'BUSINESS INCOME' UNDER SECT/ON 28(I) READ WITH SECTION 2(13). C) ON APPEAL, THE COMMISSIONER (APPEALS) HELD THAT THE INTENTION OF THE ASSESSEE WAS NEVER TO PURCHASE THE AFORESAID LANDS WITH A VIEW TO CULTIVATE THE SAME. HENCE, SHE CONFIRMED THE ACTION OF THE ASSESSING OFFICER IN HOLDING THAT ACTIVITIES CARRIED OUT BY T HE ASSESSEE TOWARDS PURCHASE AND SALE OF IMPUGNED LAND AS 'ADVENTURE IN NATURE OF TRADE' AND THUS, A BUSIN ESS ACTIVITY CHARGEABLE TO TAX. HELD A) ON CONSIDERATION OF VARIOUS MATERIALS ON RECORD IT IS OBSERVED THAT THE ASSESSEE ACQUIRED CERTAIN PARCEL OF LAND AT ANNAPUR VILLEGE OF PUNE AND THEREAFTER RE-S OLD WITHIN A VERY SHORT SPAN OF ABOUT ONE AND HALF MONT HS OR SO. THE TRANSACTION OF IMPUGNED PURCHASE AND SAL E HAS GIVEN RISE TO PROFITS WHICH WAS BROUGHT TO TAX BY THE REVENUE AS AN 'ADVENTURE IN THE NATURE OF TRADE ' UNDER SECTION 28 READ WITH SECTION 2(13). THE ASSES SEE HAS DISPUTED THE AFORESAID ACTION OF THE REVENUE ON VARIOUS COUNTS, FIRSTLY, IT IS THE CASE OF THE ASSE SSEE THAT THE PURCHASE AND SALE TRANSACTION OF IMPUGNED LAND IS A TRANSACTION OF CAPITAL NATURE AND CONSEQUENTLY, GAIN ARISING THEREFROM IS CHARGEABLE UNDER SECTION 45 UNDER THE HEAD 'CAPITAL GAINS' IN CONTRAST TO STAND OF THE REVENUE SEEKING TO TREAT T HE LAND SO ACQUIRED AS A 'TRADING ASSET' AND, THUS, TA XING RESULTANT PROFITS ON ITS SALE AS 'BUSINESS INCOME' UNDER SECTION 28. SECONDLY, IT IS THE CASE OF THE ASSESSE E THAT THE IMPUGNED LAND IS AN AGRICULTURAL LAND. THIRDLY, THE IMPUGNED AGRICULTURAL LAND IS SITUATED IN RURAL AREA OUTSIDE THE JURISDICTION OF MUNICIPALITY OR CANTONMENT BOARD ETC. IS THUS OUTSIDE THE PURVIEW O F DEFINITION OF 'CAPITAL ASSET' DEFINED UNDER SECTION 2(14) IN VIEW OF THE EXCLUSIONS PROVIDED IN SUB-CLA USE (HI) THEREIN. FOURTHLY, THERE BEING NO TRANSFER OF 'CAPITAL ASSET' PER SE IN VIEW OF THE EXCLUSIONS FO R RURAL AGRICULTURAL LAND AS NOTED ABOVE, GAIN ARISIN G THEREFROM IS NOT TAXABLE UNDER SECTION 45 AT ALL. I N ESSENCE, THE ASSESSEE CLAIMS THAT THE GAIN ARISING ON SALE OF AGRICULTURAL PROPERTY NOT BEING A CAPITA/ A SSET IS NOT SUBJECT TO TAX AT ALL IN VIEW OF THE MANDATE OF LAW IN THIS REGARD. [PARA 7] B) UNDER SECTION 45, THERE CANNOT BE ANY LEVY OF C APITAL GAINS UNLESS THE ASSET TRANSFERRED IS A 'CAPITAL AS SET' AS DEFINED UNDER SECTION 2(14). IT IS THE CASE OF T HE ASSESSES THAT THE TRANSACTION IS CAPITAL IN NATURE AND THE IMPUGNED LAND NOT BEING A 'CAPITAL ASSET', THE GAIN ARISING ON SALE OF PROPERTY NOT BEING A CAPITAL ASS ET IS NOT CHARGEABLE TO TAX ALL. THE REVENUE ON THE OTHER ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 14 - 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 LEND S CREDENCE TO THE IMPRESSION OF AN ADVENTURE IN THE NATURE OF TRADE REFERRED TO IN SECTION 2(13) AND, THEREFORE, IT IS AKIN TO 'BUSINESS' GIVING RISE TO ITS TAXABILITY UNDER SECTION 28. [PARA 7.1] C) THE QUESTION OF DETERMINATION OF OTHER ISSUES NAMELY WHETHER THE LAND IS AGRICULTURAL LAND AND IF SO WHETHER THE IMPUGNED LAND IS OUTSIDE THE DEFINITION OF 'CAPITAL ASSET' TO CLAIM EXEMPT/ON FROM APPLICABILI TY OF SECTION 45 WILL ARISE ONLY IF THE IMPUGNED TRANSACTION DO NOT BEAR THE TRAPPINGS OF ADVENTURE IN THE NATURE OF TRADE OR COMMERCE ETC. THUS, IN THE CONTEXT OF CASE IN HAND, FIRST AND FOREMOST CONTROV ERSY THAT CALLS FOR ADJUDICATION IS WHETHER THE IMPUGNED TRANSACTION IS A BUSINESS TRANSACTION OR A CAPITAL TRANSACTION. [PARA 7.2] D) IN THIS CONTEXT, IT IS NOTED THAT THERE IS A QU ALITATIVE DIFFERENCE BETWEEN PROFITS ARISING FROM SALE OF CAP ITAL ASSETS AND THAT OF TRADING ASSETS. SECTION 2(13) DEFINING 'BUSINESS' AND SECTION 2(14) DEFINING CAPI TAL ASSETS OPERATES IN MUTUAL EXCLUSION. TO PUT IT DIFFERENTLY, CAPITAL ASSETS AND TRADING ASSETS OR S TOCK- IN-TRADE ARE TREATED DIFFERENTLY UNDER THE SCHEME O F THE ACT. THEY CANNOT BE COMPARED ON PAR WITH EACH OTHER AS A SIMILAR CLASS OF ASSETS. SECTION 2(13) DEFINES THE EXPRESSION 'BUSINESS' IN AN INCLUSIVE MANNER AND FURTHER EMBRACES ANY ADVENTURE IN THE NATURE OF TRADE OR COMMERCE ETC. WITHIN ITS SWEEP. [PARA 7.3] E) THE CLAIM OF THE ASSESSEE IS THAT THE INTENTIO N AT THE TIME OF PURCHASE OF LAND WAS TO HOLD IT FOR HIS ENJOYMENT AND TO EARN REGULAR YIELD THEREON AND, TH US, IS A CAPITAL TRANSACTION. NEEDLESS TO SAY, THESE INTENTIONS ARE INCAPABLE OF ANY PROOF. THESE CAN ON LY BE INFERRED ON THE BASIS OF FACTS AND CIRCUMSTANCES OF EACH CASE. THE FACTS OF THE CASE AS NARRATED ABOVE ARE QUITE PECULIAR. AS NOTED, THE ASSESSEE HAS PURCHASE D LARGE TRACTS OF LAND FOR A SUBSTANTIAL CONSIDERATIO N. SIMULTANEOUSLY, THE WIFE OF THE ASSESSEE HAS ALSO PURCHASED SOME PARCELS OF ADJACENT LAND FOR A CONSIDERATION. THE COMBINED LAND AREA IS STATED TO BE NEARLY 18 HECTARES AND 45R EQUIVALENT TO 45 ACRES A ND 28 GUNTHAS. THE AFORESAID LAND WAS SOLD ALTOGETHER BY THE ASSESSEE JOINTLY WITH HIS WIFE FOR A COMBINED CONSIDERATION OF RS. 2 CRORES. THE SHARE OF PROFIT OF THE ASSESSEE IS STATED TO BE RS. 35.87 LAKHS ON ACC OUNT OF TRANSACTION OF SUCH PURCHASE AND SALE. IMMEDIATE LY AFTER THE IMPUGNED PURCHASE, A SALE DEED WAS EXECUT ED BETWEEN FAMILY 'P' AND THE ASSESSEE AND HIS WIFE JOINTLY. THE LAND IS CLAIMED TO BE AN AGRICULTURAL LAND BY THE ASSESSEE. PERTINENTLY, THE BUYER (FAMILY 'P' ) HAD EARLIER ADVANCED A SUM RS. 1 CRORE TO THE ASSESSEE THROUGH DEMAND DRAFT (DD) DATED 13-8-2008 ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 15 - I.E. TWO MONTHS BEFORE ASSESSEE HAD PURCHASED THE PROPERTY. EVIDENTLY, ASSESSEE DID NOT POSSESS ANY O WN LIQUID FUNDS AT HIS DISPOSAL TO ENABLE HIM TO ACQUI RE THE IMPUGNED LAND. THE ENTIRE PURCHASE COST IS FUND ED BY FAMILY 'P'. THUS, APPARENTLY, THE ENTIRE MONEY TOWARDS PURCHASE OF LAND HAS BEEN FINANCED BY THE PERSONS TO WHOM THE LAND WAS ULTIMATELY SOLD IN A VERY SHORT SPAN OF TIME. THE PURCHASE AND SUBSEQUEN T SALE OF THE LAND HAS QUICKLY HAPPENED WITHIN A MARGINAL TIME GAP OF ABOUT ONE AND HALF MONTHS. THE CONTENTION ON BEHALF OF THE ASSESSEE WAS THAT ASSES SEE INTENDED TO SALE OTHER AGRICULTURAL LAND IN HIS POSSESSION TO RETURN THE MONEY BORROWED FROM FAMILY 'P' WHICH DID NOT FRUCTIFY. FOR THIS PURPOSE, SOME MEMORANDUM AGREEMENT WAS REFERRED TO BY WAY OF ADDITIONAL EVIDENCE. HOWEVER, THERE IS NOTHING ON RECORD TO JUSTIFY THE CIRCUMSTANCES WHICH PREVENTED THE ASSESSEE TO PRODUCE THE IMPUGNED AGREEMENT BEFORE REVENUE AUTHORITIES. NO PERCEPTIBLE REASONS HAVE BEEN ASSIGNED. NOTWITHSTANDING, PURPORTED AGREEMENT FOR SALE OF OTHER AGRICULTURAL LAND WAS N OT ACTED UPON AT ALL. NO ADVANCE WAS RECEIVED AGAINST SUCH PURPORTED AGREEMENT EITHER. THE ENTIRE EXPLANATION FOR INITIAL INTENTION TO RETURN BORROWE D MONEY WHICH FAILED IS THUS BALD AND UNVERIFIABLE. I T ALSO DOES NOT COINCIDE WITH A NORMAL BEHAVIOR OF A PERSON OF ORDINARY PRUDENCE. THE ENTIRE EXPLANATION BASED ON A DUMB DOCUMENT NOT ACTED UPON, THUS, HAS NO RATIONAL PROBATIVE VALUE OF THE PURPORTED INTENT ION TO RETURN FRIENDLY BORROWALS. WHETHER THE VALUE OF EXISTING LAND RECORDED IN THE PURPORTED AGREEMENT W AS CAPABLE OF MATCHING THE BORROWALS IS ALSO NOT AVAILABLE ON RECORD. THE RELEVANT FINANCIAL DATA PROVING THE FINANCIAL CAPACITY OF THE ASSESSEE IS N OT AVAILABLE TO JUSTIFY THE STAND. MERE AVERMENTS OF GENERIC NATURE BASED ON SOME DOCUMENTS WHICH WERE NEITHER VERIFIED BY THE REVENUE NOR ACTED UPON IN A NY MANNER CANNOT BE TAKEN AS SOURCE OF EXPLANATION FOR TRANSACTION OF SUCH MAGNITUDE. THE ASSESSEE HAS MAD E OUT A CASE THAT OWNING TO THE PRESSURE FROM FAMILY 'P' TO RETURN THEIR LOAN AMOUNT WHICH WAS NOT IMMEDIATELY POSSIBLE DUE TO FINANCIAL CONSTRAINTS, IT WAS RELUCTANTLY PROPOSED TO SELL THE IMPUGNED LAND SO PURCHASED BY THE ASSESSEE. IT WAS THUS MADE OUT THA T THE COMPELLING CIRCUMSTANCES PROPELLED THE ASSESSEE TO ENTER INTO SUCH UNINTENDED RESALE. IT WAS THUS INSISTED THAT THERE WAS NO INTENTION TO EARN IMMEDI ATE PROFITS BY ITS SALE. THE LAND WAS THUS CLAIMED TO B E 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 A N 'ADVENTURE IN THE NATURE OF TRADE' AS HELD BY THE ASSESSING OFFICER. SUCH EXPLANATION IS FOUND TO BE SHALLOW AND SUPERFICIAL. THE RETURN OF INCOME FILED BY THE ASSESSEE SHOWS THAT THE SOURCE OF REGULAR INCOM E ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 16 - IS NOT COMMENSURATE WITH THE MAGNITUDE OF THE LAND TRANSACTION. A PERSON INTENDING TO HOLD A LAND OF T HIS VALUE FOR ITS OWN EXPLOITATION AND ENJOYMENT AND NO T INVESTING ANY MONEY OF HIS OWN ARE QUITE CONTRADICTORY CONDUCT. THE ASSESSEE SEEKS TO EXPLAI N THAT HE WAS WHOLLY DEPENDENT OF SALE OF EXISTING AGRICULTURAL LAND TO SUBSTITUTE THE MONEY FINANCED BY THE LENDER BY HIS OWN IS WITHOUT ANY TANGIBLE EVIDE NCE SHOWCASING THE AFORESAID INTENTION. ON THE OTHER HAND, HERE IS A FINANCIER WHO HAS GIVEN MONEY OF FORMIDABLE AMOUNT PURPORTEDLY ON A FRIENDLY CONSIDERATION WITHOUT ANY CORRESPONDING COMMERCIAL BENEFIT AND THEN SUDDENLY TURNS HEAT FOR RETURN OF MONEY AND THEREAFTER CONVENIENTLY AGREES TO ACQUIRE THE SAME LAND WITHOUT ANY DEMUR WHICH WAS PURCHASED FROM THE AFORESAID MONEY AND THAT TOO AT VERY LARGE DIFFERENTIALS IN SUCH A VERY SHORT SPAN. THESE FACT S WHEN COMBINED TOGETHER GIVES A COMMON THREAD TO BELIEF THAT ENTIRE TRANSACTION WAS SYSTEMATIC AND P RE ORDAINED ONE, VENTURED INTO WITH 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 L AND WAS OBTAINED AND IN THE PROCESS, ABNORMAL AND EXORBITANT GAINS WERE EARNED. THE PATTERN OF SEQUENTIAL EVENTS DEARLY SUGGESTS THAT THE FUND RECEIVED IN ADVANCE FOR SUCH PURCHASE SERVED AS AN ASSURANCE FOR THE TRANSACTION TO SAIL THROUGH. NOTA BLY, INITIAL FUNDS OF RS. 1 CRORE WERE PROVIDED TO THE ASSESSEE BY FAMILY 'P' BY WAY OF A DEMAND DRAFT UNL IKE CHEQUE TRANSACTIONS. REASONS FOR FRIENDLY LOAN GIVE N BY WAY OF A DEMAND DRAFT WITHOUT 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 TRANS FER OF LAND TO THE ULTIMATE BUYER ALMOST IMMEDIATELY ON ITS ACQUISITION CANNOT BE SIMPLY BRUSHED ASIDE. CLEARLY, THE ASSESSEE WAS INTERESTED IN EXPLOITING COMMERCIAL OPPORTUNITY FOR QUICK GAINS IN A VERY SH ORT TIME HORIZON. THE ATTENDANT FACTS ALSO POINTS OUT T HAT THE PURCHASE OF LAND WAS FAR BEYOND THE EARNING CAPACITY OF THE ASSESSEE AND, THUS, CLAIM OF THE ASSESSEE THAT THE LAND WAS INTENDED FOR PERSONAL US E AND ITS EXPLOITATION AND FOR APPRECIATION WITH EFFL UX OF TIME IS UTTERLY IMPROBABLE AND THUS IS DEVOID OF MERITS. A COMBINED READING OF ALL CONNECTED FACTS WARRANT FOR AN INESCAPABLE CONCLUSION THAT THE MOTI VE FOR PURCHASE ITSELF WAS FOR EMBARKING IN AN ADVENTU RE IN THE NATURE OF TRADE. [PARA 7.5] F) IT IS ALSO NOTED THAT THE OTHER CONTENTIONS O F THE ASSESSEE WERE THAT 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 OPERATIONS AND, THEREFORE, ADVERSE INFERENCE AGAINST THE ASSESSES IS NOT JUSTIFIED. ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 17 - HOWEVER, THIS ARGUMENT IS ALSO NOT IMPRESSING. THE MERE PRESENCE OF OTHER HO/DINGS OF AGRICULTURAL LAN D WOULD NOT GRANT ANY INDEFEASIBLE RIGHT TO CLAIM ANY AND EVERY TRANSACTION OF LAND TO BE OF CAPITAL NATU RE. SIMILARLY, SOLITARY TRANSACTION OF SUCH NATURE IS A LSO 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 IMPUG NED TRANSACTION GIVING RISE TO THE DISPUTE IS BESET WIT H UNCHARACTERISTIC FEATURES WHICH ARE AKIN TO ADVENTU RE IN THE NATURE OF TRADE RATHER THAN A CAPITAL TRANSACTION. [PARA 7.6] G) AN INCIDENTAL POINT MAY ARISE THAT THE LAND WAS REGISTERED PRIOR TO ITS SALE AND, THUS, BE VIEWED A CAPITAL TRANSACTION. IT IS OBSERVED THAT NOTHING TU RNS ON THIS ACT OF THE ASSESSES EITHER. THE PURCHASE IN A PRE-ORDAINED TRANSACTION COULD BE REGISTERED WITH A MOTIVE TO GAIN PROXIMITY TO AND FOR OVERRIDING CONT ROL OVER THE SALE TRANSACTION. THE ENCUMBRANCE IF ANY, THEREON CAN ALSO BE WEIGHED BY THE ULTIMATE BUYER F OR HIS COMFORT IN PURCHASE. ALSO, BY REGISTRATION PRIO R TO SALE, THE HUGE POTENTIAL OF GAIN CAN BE HARNESSED WITHOUT ANY POSSIBLE INTERFERENCE. THIS HAS ALL BEE N DONE WITH THE MONEY OF THE ULTIMATE BUYER WITHOUT A NY COMMITMENT OF HIS OWN. THE TRANSACTION IS DEARLY DRIVEN BY COMMERCE. THE INTENTION TO EXPLOIT THE LA ND FOR ITS OWN AGRICULTURAL USE IS NOT BORNE OUT ON TH ESE 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. [PA RA 7.7] H) PERTINENT TO NOTE HERE THAT THE SUPREME COURT I N THE CASE OF DALMIA CEMENT LTD. V. OT [19761105ITR 633 HELD THAT IT IS NOT POSSIBLE TO EVOLVE ANY SINGLE L EGAL TEST OR FORMULA WHICH COULD BE APPLIED IN DETERMINI NG WHETHER A TRANSACTION IS AN ADVENTURE IN THE NATURE OF TRADE AND THAT THE ANSWER TO THE QUESTION MUST DEPE ND IN EACH CASE ON THE TOTAL IMPRESSION AND EFFECT OF ALL THE RELEVANT FACTORS AND CIRCUMSTANCES PROVED THERE IN AND WHICH DETERMINE THE CHARACTER OF THE TRANSACT/O N. [PARA 7.8] I) THUS, THE CUMULATIVE FACTS AND CIRCUMSTANCES S EEN HOLISTICALLY AND READ IN CONJUNCTION THE TESTS OR PARAMETERS LAID DOWN BY JUDICIAL PRECEDENTS PROVIDE S SOUND BASIS TO INFER THE INTENTION OF COMMERCIAL GA IN IN THE IMPUGNED TRANSACTION. [PARA 7.9] J) HAVING REGARD TO THE TOTALITY OF FACTS AND CIRCUMSTANCES, IT IS TO BE HELD THAT THE IMPUGNED L AND WAS PURCHASED WITH AN INTENT/ON TO SELL THE SAME TO THE IDENTIFIED BUYERS TO ACHIEVE COMMERCIAL OBJECTI VES OUTRIGHT. AS NOTED EARLIER, SECTION 2(13) SEEK TO EXPLAIN THE TERM OF 'BUSINESS' BY WAY OF INCLUSIVE DEFINITION. AS PER SECTION 2(13) EXPRESSION 'BUSINE SS' INCLUDE NOT ONLY TRADE OR COMMERCE, ETC. BUT DEFINI TION ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 18 - FURTHER EXTENDS TO ENCOMPASS WITHIN ITS AMBIT AN 'ADVENTURE IN THE NATURE OF TRADE'. THE ENTIRE GAMU T OF ACTION OF THE ASSESSEE IN ENGAGING IN SUCH BIG TICK ET LAND PURCHASE WITHOUT EMPLOYING ANY FUND OF HIS OWN AND ALMOST IMMEDIATE RESALE THEREOF CLEARLY DEMONSTRATES THE IMPLICIT INTENTION OF THE ASSESSEE THAT THE TRANSACTION ENTERED WAS NOTHING BUT AN 'ADVENTURE IN THE NATURE OF TRADE' I.E. A BUSINESS TRANSACTION UNDER EXTENDED DEFINITION OF SECTION 2( 13). CONSEQUENTLY, PROFITS ARISING THEREFROM ACQUIRES TH E CHARACTER OF 'BUSINESS INCOME' CHARGEABLE UNDER SECTION 28. [PARA 8] K) THUS, THE VIEW OF THE ASSESSING OFFICER AND THE COMMISSIONER (APPEALS) IN BRINGING THE INCOME ARISING ON SALE OF LAND UNDER THE HEAD 'BUSINESS INCOME IS ACCEPTABLE. [PARA 9] 6.5 IN THE LIGHT OF THE ABOVE FACTS OF THE APPELLAN T AS COMPARED WITH RELIED UPON TWO CASES AS MENTIONED ABOVE, IT IS HEL D THAT THE APPELLANT HAD CARRIED OUT AN ADVENTURE IN THE NATURE OF BUSIN ESS AS DEFINED IN SECTION 2(13) OF THE ACT WITH A VIEW TO EARN THE PR OFIT ON SALE OF THE LAND IN QUESTION WHICH WAS TO BE DEVELOPED AS A COMMERCI AL PROPERTY BY THE PRE-DETERMINED BUYER OF THE LAND. THUS, THE ADDITIO N MADE BY THE ASSESSING OFFICER OF RS.2,97,02,410/- AS PROFIT OF THE BUSINESS AND IN LIEU OF CAPITAL GAINS OF RS.1,36,21,351/- DECLARED BY TH E APPELLANT IN THE RETURN OF INCOME IS CONFIRMED. IN THE RESULT, THE SOLE GROUND OF APPEAL IS REJECTED. THE CIT(A) ACCORDINGLY DECLINED TO INTERFERE WITH T HE ORDER OF THE AO AND REFUSED TO GRANT ANY RELIEF CLAIMED IN THE APPE AL. 5. FURTHER AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 6. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE BROADLY REITERATED THE CONTENTIONS MADE BE FORE THE LOWER AUTHORITIES AND SUBMITTED THAT BOTH THE AUTHORITIES HAVE MISDIRECTED THEMSELVES IN APPRECIATING THE FACTS AND HAVE APPLI ED WRONG TESTS TO COME TO AN ADVERSE CONCLUSION. THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS AN INDIVIDUAL AND HI S NEVER ENTERED INTO PURCHASE AND SALE OF LAND IN PAST AND THIS IS THE O NLY LAND TRANSACTION CARRIED OUT. THE ASSESSEE ALONGWITH OTHERS HAD PUR CHASED LAND IN 2011 OF NEARLY 17,125 SQ.MTRS. WHEREAS THE SALE WAS MADE OF ONLY 4228.62 ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 19 - SQ.MTRS. I.E. AROUND 25% ONLY AND THE REST OF THE L AND ALSO CONTINUED TO BE HELD BY THE ASSESSEE. THE ASSESSEE HAS NOT UNDE RTAKEN ANY LAND DEVELOPMENT ACTIVITY OF HIS OWN. THE CONVERSION OF AGRICULTURAL LAND INTO NA LAND WAS STATED TO BE LEGAL COMPULSION FAIL ING WHICH THE LAND COULD NOT HAVE BEEN TRANSFERRED. IT WAS FURTHER AS SERTED THAT CONSOLIDATION OF DIFFERENT PARCELS OF LANDS COULD N OT BE RECORDED AS ANY BUSINESS ACTIVITY PER SE. SUCH ACTS WERE DONE IN DECEMBER 2012 AND SEPTEMBER 2013 WHEREAS THE NEGOTIATION FOR SALE OF LAND COMMENCED IN AUGUST 2014. THE PLANS WERE SUBMITTED AS PER THE REQUIREMENT OF PURCHASER AND THE APPELLANT WAS NOT CONCERNED WITH SUCH ACT WHATSOEVER EXCEPT FOR DEAL TO SAIL THROUGH . IT WAS FURTHER POINTED OUT THAT THE SALE PROCEEDS OF THE SAID PLOT WERE NOT UTILIZED FOR ACQUIRING ANOTHER LAND WHICH IS A NORMAL COURSE IN THE CASE OF A TRADER. IT WAS THUS SUBMITTED THAT MERELY BECAUSE T HE PROPERTY WAS SOLD AT A HIGH PROFIT WOULD NOT GIVE RISE TO ANY PR ESUMPTION TOWARDS AN ADVENTURE IN THE NATURE OF TRADE. THE LEARNED A R FOR THE ASSESSEE RELIED UPON THE DECISION OF THE CO-ORDINATE BENCH I N RAM SAROOP SAINI HUF VS. ACIT ITA NO. 1409/DEL/2005 ORDER DATED 27 TH MAY, 2007 TO CONTEND THAT WHERE A PORTION OF AGRICULTURAL LAND W AS CONVERTED INTO NA LAND AND THEREAFTER SOLD, THE SURPLUS ARISING TH EREFROM SHOULD NOT BE REGARDED AS BUSINESS ACTIVITY. THE LEARNED AR ASSAILED THE ACTION OF THE LOWER AUTHORITIES AND SUBMITTED THAT SUCH AC TION OF THE REVENUE WAS GUIDED BY CONSIDERATION OF REVENUE ALONE TO GAT HER UNLAWFUL TAXES FROM THE ASSESSEE. THE LEARNED AR ACCORDINGL Y URGED FOR REVERSAL OF THE ACTION OF THE LOWER AUTHORITIES AND RESTORATION OF CLAIM OF THE ASSESSEE FOR TAXABILITY OF SURPLUS ARISING F ROM SALE UNDER THE HEAD CAPITAL GAINS. 7. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE RELEVANT F ACTS HAVE BEEN OBJECTIVELY ANALYZED BY THE CIT(A) WHILE AFFIRMING THE ACTION OF THE ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 20 - AO. THE LEARNED DR FOR THE REVENUE SUBMITTED THAT WHEN ALL THE FACTS AS NARRATED BY THE AO AND CIT(A) ARE READ TOGETHER, THE CONCLUSION CANNOT BE FAULTED. IT WAS SUBMITTED THAT THE ASSES SEE HAS ACQUIRED THE LAND IN FY 2011-12 AND 2012-13 AND THEREAFTER TOOK A SERIES OF ACTION IMMEDIATELY THEREAFTER PRIOR TO ITS SALE WITHIN A S HORT TIME HORIZON. THE CONCERTED ACTION UNDERTAKEN BY THE ASSESSEE ONE AFTER THE OTHER IMMEDIATELY AFTER PURCHASE WOULD SUGGEST THAT THE A SSESSEE WAS IN HURRY TO EXPLOIT THE LAND AND MAXIMIZE ITS VALUE CO MMERCIALLY. THE LEARNED DR ACCORDINGLY SUBMITTED THAT THE CONCESSIO NAL TREATMENT AVAILABLE TO THE PROFITS ARISING ON SALE OF A CAPIT AL ASSET CANNOT BE GIVEN TO THE ASSESSEE HEREIN WHERE THE SURROUNDING CIRCUMSTANCES CLEARLY SUGGEST THAT THE ASSESSEE INTENDED TO RESAL E THE LAND AT BEST AVAILABLE PROFITS BY INDULGING IN COMMERCIAL BEHAVI OR. THE LEARNED DR ACCORDINGLY SUBMITTED THAT NO INTERFERENCE WITH THE ORDER OF THE LOWER AUTHORITIES IS CALLED FOR. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE SOLITARY ISSUE FOR ADJUDICATION IS WHETHER THE PROF ITS EARNED ON SALE OF CERTAIN PARCELS OF LAND BY THE ASSESSEE IN THE RELE VANT ASSESSMENT YEAR IS REQUIRED TO BE TAXED UNDER THE HEAD CAPITAL GAI NS (AT CONCESSIONAL RATE) AS OFFERED BY THE ASSESSEE OR IS TO BE TREATE D AS BUSINESS INCOME (SUSCEPTIBLE TO TAX AT HIGHER RATE) OF THE ASSESSEE AS REALIGNED BY THE AO. 8.1 THE ISSUE INVOLVED IS ESSENTIALLY FACTUAL IN NA TURE AND DEPENDS SQUARELY UPON THE TOTALITY OF THE FACTS OF A GIVEN CASE. THEREFORE, NO RIGID LEGAL TEST CAN BE APPLIED PER SE AND THE QUESTION HAS TO BE DETERMINED ON THE BASIS OF THE TOTALITY OF FACTS GI VEN CASE. NO SINGLE FACT COULD THUS BE SEEN IN ISOLATION. AS NOTED, IT IS THE CASE OF THE ASSESSEE THAT THE PLOTS/LAND PARCELS WERE PURCHASED IN FYS. 2011-12 & 2012-13 ALONGWITH OTHER CO-OWNERS BY DIFFERENT REGI STRATION DEEDS FROM DIFFERENT OWNERS. HOWEVER, THE LAND SALE TRAN SACTION IN QUESTION ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 21 - IS A SINGLE LAND TRANSACTION AND SOLD TO ONE PARTY WITHOUT ANY SUB- DIVISION THEREOF IN SMALLER PLOTS. IT IS FURTHER C ASE OF THE ASSESSEE THAT HE HAS NOT ENTERED INTO ANY DEVELOPMENTAL ACTIVITY OF PLOT, SUCH AS, EARTH FILLING, CONSTRUCTION OF BOUNDARY WALL ETC. THE LAND PARCELS WERE NOT TREATED AS TRADING ASSET IN THE BOOKS. THE PRI MARY BUSINESS OF THE ASSESSEE IS FINANCE ONLY AND THE ASSESSEE HAD ACQUI RED THE LAND WITH THE ONLY MOTIVE TO FETCH CAPITAL APPRECIATION. SOME PARCELS OF THE LAND IN QUESTION BEING AN AGRICULTURAL LAND AT THE TIME OF PURCHASE FACED LEGAL RESTRICTION OF SALE (ONLY TO AGRICULTURISTS) AND THEREFORE, THE LANDS WERE CONVERTED INTO NA LAND AS PER THE PRESCRIBED P ROCEDURE. THE CONVERTED LAND WAS SOLD IN FY 2014-15. THUS, A SOL ITARY TRANSACTION GIVING RISE TO SURPLUS WAS RIGHTLY OFFERED UNDER TH E HEAD CAPITAL GAINS IN THE CIRCUMSTANCES OF THE CASE. 8.2 THE REVENUE, ON THE OTHER HAND, CONTENDS THAT T HE TRANSACTION OF PURCHASE AND SALE OF LAND PARCELS IS AN ADVENTURE I N THE NATURE OF TRADE AS DEFINED IN SECTION 2(13) OF THE ACT AND CONSEQUE NTLY, THE PROFITS ARISING ON SALE OF LAND IS REQUIRED TO BE TAXED UND ER S.28 OF THE ACT. THE PRE-DOMINANT CONTENTION OF THE REVENUE IS THAT THE ASSESSEE HAS INDULGED IN NOT MERELY PURCHASE AND SALE OF LAND BU T HAS UNDERTAKEN MEASURED STEPS IN TANDEM TO SIGNIFICANTLY IMPROVE T HE VALUE OF THE LAND FOR ITS COMMERCIAL EXPLOITATION AND CONSEQUENT LY, THE EXTRAORDINARY PROFITS ARISING FROM SALE OF LAND IN A SHORT TIME HORIZON DO NOT SUPPORT THE CLAIM OF THE ASSESSEE FOR ITS CH ARGEABILITY UNDER THE HEAD CAPITAL GAINS. 8.3 ON A PERUSAL OF THE ASSESSMENT ORDER, WE OBSERV E THAT THE AO HAS TABULATED THE PARCELS OF LAND PURCHASED BY THE ASSESSEE BETWEEN SEPTEMBER 2011 TO OCTOBER 2012 ALONGWITH OTHER CO-H OLDERS. IT IS FURTHER NOTICED BY THE AO THAT THE LAND PARCELS BEI NG ADJOINING TO EACH OTHER WERE MERGED AND CONSOLIDATED IN A SINGLE PIEC E OF LAND BY VIRTUE OF THE ORDER OF THE COMPETENT AUTHORITY. THE LAND USE WAS ALSO ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 22 - MODIFIED FROM AGRICULTURAL LAND TO NON-AGRICULTURAL LAND. THE AO FURTHER NOTICED THAT THE ASSESSEE ALONGWTIH OTHER C O-HOLDERS GOT THE LAY OUT PLAN APPROVED FROM THE COMPETENT AUTHORITY INIT IALLY FOR THE PLOTTING OF LAND AND SUBSEQUENTLY TO BUILD RESIDENT IAL BLOCKS WITH SMALL BUSINESS CENTRE AND FINALLY RESIDENTIAL BLOCK WITH A COMMERCIAL UNIT. IT IS THUS THE CASE OF THE AO THAT FREQUENT CHANGES MADE IN THE LAND USE WOULD INDICATE THE REAL INTENT OF THE ASSE SSEE TO DO THE BUSINESS OF LAND DEVELOPMENT. IT IS EMPHASIZED ON BEHALF OF REVENUE THAT THE APPLICATION WAS MADE FOR REVISION OF LAND USE FOR COMMERCIAL PURPOSE PRIOR TO THE BOARD RESOLUTION OF THE PURCHA SER COMPANY INTENDING TO ACQUIRE A PORTION OF THE AFORESAID LAN D PARCELS AND NOTICEABLY FIRST INSTALLMENT WAS ALSO RECEIVED SUBS EQUENT TO THE APPLICATION MOVED FOR EXPLOITATION OF LAND FOR COMM ERCIAL PURPOSES. THUS, THE CASE MADE OUT ON BEHALF OF THE ASSESSEE T HAT THE ACTIONS WERE UNDERTAKEN ON BEHALF OF BUYER IS UNSUPPORTABLE ON F ACTS. THE PURCHASERS WERE HANDED OVER THE POSSESSION WITH ITS COMMERCIAL USE SO AS TO CONSTRUCT THE MALL BY THE PROPOSED BUYER. 8.4 ON A CUMULATIVE READING OF THESE GLARING FACTS, THE REAL INTENTION OF THE ASSESSEE IS QUITE DEMONSTRABLE. THE ASSESSE E HAS PURCHASED THE LAND IN SEPTEMBER 2011 ONWARDS AND SWUNG INTO ACTIO N IMMEDIATELY THEREAFTER FOR CONVERSION OF LAND INTO NA LAND, MER GER OF LAND, CONVERSION OF LAND FOR COMMERCIAL USE ETC. AS NOTE D BY THE AO, THE ASSESSEE ALSO GOT A LAY OUT PLAN APPROVED FROM COMP ETENT AUTHORITY INITIALLY FOR PLOTTING OF LAND AND SUBSEQUENTLY TO BUILD THE RESIDENTIAL BLOCKS WITH SMALL BUSINESS CENTRE IN THE INTERVENIN G PERIOD. THE FACTS AND CIRCUMSTANCES OF SUCH SEQUENTIAL EVENTS GIVE RI SE TO AN INFALLIBLE IMPRESSION THAT THE DRIVING FORCE FOR PURCHASE OF L AND WAS TO EXPLOIT IT COMMERCIALLY. THE SERIES OF ACTION TAKEN BY THE AS SESSEE ONE AFTER ANOTHER DOES NOT BEAR OUT THE CONTENTION OF THE ASS ESSEE THAT THE LAND WAS PURCHASED WITH AN IDEA TO ENJOY ACCRETION TO CA PITAL AND THE ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 23 - PURCHASE TRANSACTIONS WERE MEANT FOR MAXIMIZATION O F WEALTH. WHILE IT IS THE CASE OF THE ASSESSEE THAT THE LAND PARCELS W ERE HELD AS CAPITAL ASSET PRIOR TO SALE, SUCH CONTENTION APPEARS TO BE SHALLOW. IT IS AN ADMITTED POSITION THAT THE LAND PARCELS WERE NOT SU BJECTED TO WEALTH TAX AS APPLICABLE TO CAPITAL ASSETS. COUPLED WITH THIS, WE ALSO FAIL TO SEE ANYTHING ON RECORD TO SUGGEST THE USE OF THE LA ND FOR AGRICULTURAL PURPOSE OR FOR ANY PURPOSE TO ENABLE THE ASSESSEE T O GENERATE ANY REGULAR YIELD ALTOGETHER THEREON. THE ABSENCE OF A NY YIELD ALSO GIVES AN IMPRESSION THAT ASSESSEE NEVER INTENDED TO EXPLO IT THE LAND FOR ITS OWN USE OR ENJOYMENT. THE CONCERTED AND MEASURED A CTION OF THE ASSESSEE AS NOTED ABOVE UNDERSCORES THE OVERRIDING MOTIVE OF THE ASSESSEE TO MAXIMIZE THE PROFIT WITH SYSTEMATIC ACT ION. IT IS THUS TOUGH TO DEBUNK THE PERCEPTION THAT THE LANDS WERE PURCHASED AS TRADING ASSETS INDEED TO REAP PROFITS COMMERCIALL Y. SUCH INFERENCE ALSO GAINS TRACTION FROM THE FACT THAT THE ASSESSEE HAS REPORTED A PROFIT IN THE VICINITY OF RS.3 CRORES ON INVESTMENT OF RS. 10.60 LAKHS WITHIN A SPAN OF THE 3-4 YEARS. SUCH PROFITS ARE POSSIBLY ATTRIBUTABLE TO THE INTERMEDIATE STEPS OF SUBSTANTIAL NATURE UNDERTAKEN BY THE ASSESSEE FOR COMMERCIAL EXPLORATION. THE WHOLE APPROACH OF THE ASSESSEE IS THUS NOTHING BUT A PURELY BUSINESS ORIENTED APPROACH. 8.5 THE ASSESSEE HAS HARPED ON THE FACTS THAT THIS IS A SOLITARY TRANSACTION OF PURCHASE AND SALE OF LAND AND THEREF ORE OUGHT NOT TO HAVE BEEN REGARDED AS A BUSINESS ACTIVITY. WE DO NOT FIND ANY WEIGHT IN SUCH PLEA. THE ASSESSEE HAS NOT MERELY P URCHASED AND SOLD A PORTION OF LAND BUT HAS TAKEN CALCULATED STEPS ONE AFTER THE OTHER WITH COMMERCIAL MOTIVES IN MIND. WHILE IT IS TRUE THAT A SOLITARY TRANSACTION IS NOT TO BE ORDINARILY REGARDED AS A BUSINESS TRANSACTION, SUCH PROPOSITION HOWEVER IS NOT ABSOLUTE AND ABSTRA CT. IT ENTIRELY DEPENDS ON THE FACTS AND CIRCUMSTANCES OF A GIVEN C ASE. SOMETIMES, A SOLITARY TRANSACTION MAY ALSO CARRY TRAPPINGS OF BU SINESS WHEREAS MULTIPLE TRANSACTIONS UNDERTAKEN ONE AFTER THE OTHE R MAY ALSO BE OUT OF ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 24 - AMBIT OF SECTION 2(13) OF THE ACT HAVING REGARD TO FACT SITUATION. A SINGLE PLUNGE THEORY THUS CANNOT BE APPLIED AS HELD IN SEVERAL JUDICIAL PRECEDENTS. A REFERENCE MAY BE MADE TO THE DECISIO N OF THE HONBLE SUPREME COURT IN RAJA J. RAMESHWAR RAO VS. CIT (1961) 42 ITR 179 (SC) IN THIS REGARD WHERE THE FACT SITUATION IS QUITE SI MILAR. IN THAT CASE, THE HONBLE SUPREME COURT REGARDED THE ACTIVI TY TO BE A BUSINESS VENTURE WHERE A PERSON ACQUIRES LAND WIT H A VIEW TO SELLING IT LATER AFTER DEVELOPING IT AND AFTER MAKING THE A REA MORE ACTIVE. THE ASSESSEE IN THE PRESENT CASE HAS DONE SOMEWHAT SIMI LAR THINGS WITH A RATHER GREATER INTENSITY. THE ASSESSEE HAS CHANGED THE CHARACTER OF LAND IN ENTIRETY AND UNDERTAKEN MULTIPLE ACTIONS WH ICH ENABLED IT TO SALE THE LAND AT ASTRONOMICAL PROFITS IN QUITE A SH ORT DURATION. THE PRO-ACTIVE CONDUCT OF THE ASSESSEE SINCE THE TIME O F PURCHASE TILL THE SALE UNDERSCORES THE REAL INTENTION OF THE ASSESSEE . IN THE PRESENT CASE, WHAT HAS BEEN DONE IS NOT MERELY A REALIZATIO N OR A CHANGE OF INVESTMENT BUT AN ACT DONE IN WHAT IS TRULY THE CAR RYING ON OF BUSINESS IN COMMERCIAL SENSE. 8.6 IT MAY BE PERTINENT TO NOTICE HERE THE PURPORT AND INTENT OF SECTION 2(13) OF THE ACT WHICH DEFINES THE EXPRESSI ON BUSINESS IN AN INCLUSIVE MANNER. THE EXPRESSION BUSINESS AS DEF INED IN SECTION 2(13) OF THE ACT DOES NOT MERELY INCLUDE ANY TRADE, COMMERCE OR MANUFACTURE BUT IS ELASTIC AND WIDER TO INCLUDE THE ADJUNCT ADVENTURE IN THE NATURE OF TRADE, COMMERCE ETC. THUS, THE L EGISLATURE HAS MADE A CONSCIOUS INCLUSION TO EXPAND THE SCOPE OF BUSINE SS TO INCLUDE CERTAIN ACTIONS AKIN TO BUSINESS IN ADDITION TO N ORMAL BUSINESS. THE ACTIVITY OF THE ASSESSEE HEREIN HAS ENGAGED THE TIM E, ATTENTION AND THE LABOUR OF THE ASSESSEE APART FROM MONEY. THE PROFI T ARISING ON SALE IS NEARLY 30 TIMES OF INVESTMENT IN A PERIOD OF 3-4 YE ARS OWING TO SUCH CONCERTED AND PLANNED ACTION. THUS, WHEN FUNCTIONA L TEST IS APPLIED, THE TRANSACTION OF PURCHASE AND SALE OF LAND HAS BE EN RIGHTLY REGARDED AS BUSINESS ACTIVITY BY THE AO. ITA NO. 361/AHD/19 [HARSHADKUMAR A. PATEL VS. DCIT] A.Y. 2015-16 - 25 - 8.7 AS OBSERVED EARLIER, THE ISSUE IS ESSENTIALLY F ACTUAL AND IS GOVERNED BY THE FACTS OF EACH CASE. JUDICIAL UTTER ANCES MADE IN THE SETTING OF THE FACTS OF A CASE WOULD THUS NOT SUPPL Y UNLESS IT IS SHOWN THAT FACTS ARE IDENTICAL. WE ARE THUS NOT REQUIRED TO DELINEATE THE NICETY OF LAW DE HORS THE FACTS OF SUCH CASE. THE RELIANCE PLACED BY THE ASSESSEE ON JUDICIAL PRECEDENTS BEFORE THE CIT( A) AS WELL AS BEFORE US ARE RENDERED IN THE FACT SITUATION WHICH ARE SUB STANTIALLY DIFFERENT. THUS, NO ABSTRACT PRINCIPLE CAN BE APPLIED IN THE P RESENT FACTS. ON THE CONTRARY, THE FACT SITUATION IS CLOSURE TO THE FACT S IN RAJA J. RAMESHWAR RAO (SUPRA) AND THEREFORE THE ISSUE IS REQUIRED TO DETERMINE IN PARITY THEREWITH. WE THUS FIND THAT T HE CIT(A) HAS RIGHTLY ENDORSED THE ACTION OF THE AO. WE FIND NO REASON TO INTERFERE WITH THE CONCLUSION DRAWN BY THE CIT(A). 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 16/09/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 16/09/201 9