ACIT, Coimbatore V. Saroj Singhania, Coimbatore

ITA 396/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7918 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 27-09-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 22-02-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: N SUBRAMANIAN ITP; G GOKUL
• Keywords: Business income; Charitable institution
• Section: 143(3); 133(6); 63

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I T.A. NO. 39 6/MDS/2016 / ASSESSMENT YEAR :20 12 - 13 & C.O. NO. 55 /MDS/2016 [IN I.T.A. NO. 39 6/MDS/2016 ] THE ASSISTANT COMMISSIONER OF INCOME TAX, NON - CO RPORATE CIRCLE 4, C OIMBATORE . VS. SMT. SAROJ SIN GHANIA, NO. 170 - A(38), GANDHI NAGAR, SUNDARAPURAM, COIMBATORE 641 024. [PAN: AA RPS4236P ] ( APPELLANT ) ( R ESPONDENT /CROSS OBJECTOR ) DEPARTMENT BY : SHRI A.V. SREEKANTH , J CIT ASSESSEE BY : SHRI N. SUBRAMANIAN, ITP & SHRI G. GOKUL, CA / DATE OF HEARING : 2 7 . 0 9 .201 6 / DATE OF P RONOUNCEMENT : 30. 11 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH IS APPEAL PREFERRED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 3 , C OIMBATORE DATED 1 6 . 1 1 .2015 FOR THE ASSESSMENT YEAR 20 12 - 13 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE I.T.A. NO . 39 6 /M/1 6 & C.O. NO. 55 /M/16 2 IS THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE TO THE BUSINESS INCOME AND CONSIDERING THE SAME AS INCOME FROM CAPITAL GAIN. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, DERIVING INCOME FROM BUSINESS AND PROFESSION, CAPITAL GAIN AND FROM OTHER SOURCES. THE ASSESSEE HAS FILED HER RETURN OF ON 31.08.2013 ADMITTING A TOTAL INCOME OF .1,34,07,500/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT]. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCR UTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE ON 01.10.2014. IN RESPONSE THERETO, THE ASSESSEE HAS FILED ALL DETAILS AS CALLED FOR. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND VERIFYING THE DETAILS, THE AS SESSING OFFICER HAS COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT BY ASSESSING TOTAL INCOME OF THE ASSESSEE AT .3,60,73,325/ - AFTER MAKING VARIOUS ADDITIONS. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER EXAMINING THE CASE OF THE ASSESSEE, THE LD. CIT(A) HAS OBSERVED THAT THE ASSESSING OFFICER HAS RELIED ON 13 TESTS WHICH ARE TO BE A PPLIED AS PER THE DECISION IN THE CASE OF CIT V. SIDDHART J DESAI 139 ITR 628 (GUJ) . AFTER ANALYSING THE ACTUAL FACTS WITH REGARD TO TEST ENFORCED IN THE ABOVE DECISION, THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE ADDITION MADE TR EATING THE INCOME FROM THE SALE OF LAND AS BUSINESS INCOME I.T.A. NO . 39 6 /M/1 6 & C.O. NO. 55 /M/16 3 CANNOT BE SUSTAINABLE ON THE GROUND THAT THE TESTS FOR TREATING THE LAND AS NON - AGRICULTURAL LAND IS NOT SATISFIED. 4. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. BY RELYIN G ON THE DECISION IN THE CASE OF RAJA J. RAMESHWAR RAO 42 ITR 179 (SC) AND IN THE CASE OF CIT V. NARASIMHA REDDY [NO CITATION WAS QUOTED] , THE LD. DR CONTENDED THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION BY CONSIDERING THE INCOME FROM CAPITAL GAIN. ON THE OTHER HAND, T HE ASSESSEE ALSO FILED CROSS OBJECTION IN SUPPORT OF THE ORDER PASSED BY THE LD. CIT(A). 5. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE MOOT QUESTION RAISED BEFORE THE TRIBUNAL IS WHETHER THE INCOME EARNED BY THE ASSESSEE IS BUSINESS INCOME OR INCOME FROM CAPITAL GAIN OUT OF THE LAND SOLD BY THE ASSESSEE. THE ASSESSING OFFICER CONCLUDED THE ASSESSMENT BY HOLDING THAT THE LAND IS NOT AGRICULTURAL IN NATURE AND THEREFO RE, THE INCOME OF THE ASSESSEE IS IN THE NATURE OF BUSINESS INCOME. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS RELIED ON 13 TESTS WHICH ARE TO BE APPLIED AS PER THE DECISION IN THE CASE OF CIT V. SIDDHART J DESAI (SUPRA) AND IN THE APPELLATE ORDER, THE LD. CIT(A) COUNTERED THE SAME AND THE DETAILS ARE REPRODUCED AS UNDER: I.T.A. NO . 39 6 /M/1 6 & C.O. NO. 55 /M/16 4 SL. NO. CRITERIA ASSESSEE S CASE 1. WHETHER THE LAND WAS CLASSIFIED IN THE REVENUE RECORDS AS AGRICULTURAL AND WHETHER IT WAS SUBJECT TO THE PAYMENT OF LAND REVENUE? LAND IS CLA SSIFIED AS AGRICULTURAL LAND IN REVENUE RECORDS BUT NO LAND REVENUE HAS BEEN PAID. AS PER THE WEBSITE DATE OF THE TAMIL NADU RECORDS, THIS LAND IS SHOWN AS WELL IRRIGATED AGRICULTURAL LAND. BUT IN REALITY IT IS BARREN LAND WITH NO IRRIGATION FACILITIES. (P HOTOGRAPHS OF THE LAND IS GIVEN IN ANNEXURE - D) 2. WHETHER THE LAND WAS ACTUALLY OR ORDINARILY USED FOR AGRICULTURAL PURPOSES AT OR ABOUT THE RELEVANT TIME? LAND IN QUESTION WAS NOT USED FOR AGRICULTURAL PURPOSES SINCE ASSESSEE PURCHASED THE LAND IN 29 . 0 3 . 2007 TILL DATE. 3. WHETHER SUCH USER OF THE LAND WAS FOR A LONG PERIOD OR WHETHER IT WAS OF TEMPORARY CHARACTER OR BY WAY OF A STOP - GAP ARRANGEMENT? LAND WAS LEFT FALLOW FROM PURCHASE TILL DATE. 4. WHETHER THE INCOME DERIVED FROM THE AGRICULTURAL OP ERATIONS CARRIED ON IN THE LAND BORE ANY RATIONAL PROPORTION TO THE INVESTMENT MADE IN PURCHASING THE LAND? INCOME FROM AGRICULTURE COULD NOT BE MORE THAN OF RS.1,00,000/ - PER ACRE. HOWEVER THE LAND WAS SOLD AT RS.92,40,000/ - ACRE. 5. WHETHER, THE PERMI SSION UNDER SECTION 65 OF THE BOMBAY LAND REVENUE CODE WAS OBTAINED FOR THE NON - AGRICULTURAL USE OF THE LAND? IF SO, WHEN AND BY WHOM (THE VENDOR OR THE VENDEE)? WHETHER SUCH PERMISSION WAS IN RESPECT OF THE WHOLE OR A PORTION OF THE LAND? IF THE PERMISSIO N WAS IN RESPECT OF A PORTION OF THE LAND AND IF IT WAS OBTAINED IN THE PAST, WHAT WAS THE NATURE OF THE USER OF THE SAID PORTION OF THE LAND ON THE MATERIAL DATE? NO, PERMISSION WAS NOT OBTAINED FOR NON - AGRICULTURAL PURPOSES. 6. WHETHER THE LAND, ON THE RELEVANT DATE, HAD CEASED TO BE PUT TO AGRICULTURAL USE? IF SO, WHETHER IT WAS PUT TO AN ALTERNATIVE USE? WHETHER SUCH CESSER AND/OR ALTERNATIVE USER WAS OF A PERMANENT OR TEMPORARY NATURE? LAND WAS NOT UTILIZED FOR AGRICULTURAL PURPOSE FROM PURCHASE TILL DATE. ALSO LAND WAS NOT UTILISED FOR ANY OTHER PURPOSE AND WAS LEFT FALLOW. 7. WHETHER THE LAND, THOUGH ENTERED IN REVENUE RECORDS, HAD NEVER BEEN ACTUALLY USED FOR AGRICULTURE, THAT IS, IT HAD NEVER BEEN PLOUGHED OR TILLED? WHETHER THE OWNER MEANT O R INTENDED TO USE IT FOR AGRICULTURAL PURPOSES? NO, LAND IN QUESTION WAS NOT PUT TO AGRICULTURE BY ASSESSEE AND ASSESSEE HAD NO INTENTION TO USE IT FOR AGRICULTURAL PURPOSES 8. WHETHER THE LAND WAS SITUATE IN A DEVELOPED AREA? WHETHER ITS PHYSICAL YES THE LAND IS SITUATED ADJACENT TO THE COIMABTORE - POLLACHI STATE HIGH WAY. INDUSTRY BY NAME M/S. I.T.A. NO . 39 6 /M/1 6 & C.O. NO. 55 /M/16 5 CHARAC TERISTICS, SURROUNDING SITUATION AND USE OF THE LANDS IN THE ADJOINING AREA WERE SUCH AS WOULD INDICATE THAT THE LAND WAS AGRICULTURAL? ASIAN ALLOYS IS SET UP ON THE ADJACENT LAND AND THERE IS A SCHOOL BY NAME KID PARK SCHOOL, KINATHUKADAVU OPPOSITE THE ASSESSEE'S LAND. THERE ARE MANY ENGINEERING COLLEGE AND INDUSTRIES IN THE NEAR VICINITY AND THE LAND IS ABOUT 3 KMS. FROM THE TALUK HEAD QUARTERS. SO THE LAND S IS SITUATED IN A DEVELOPED AREA. 9. WHETHER THE LAND ITSELF WAS DEVELOPED BY PLOTTING AND PROVIDING ROADS AND OTHER FACILITIES? NO, LAND WAS NOT DEVELOPED INTO ANY PLOTS. 10. WHETHER THERE WERE ANY PREVIOUS SALES OF PORTIONS OF THE LAND FOR NON - AGRIC ULTURAL USE? ASSESSEE HAS NOT SOLD ANY PIECE OF LAND FOR NON - AGRICULTURAL PURPOSES. HOWEVER THE ADJACENT LAND (PART OF THE SAME SF NO) WHICH BELONGS TO THE ORIGINAL OWNER HAS BEEN PUT TO NON - AGRICULTURAL USE AND AN INDUSTRY HAS BEEN IN OPERATION AS DISCUS SED IN PREVIOUS PARAS. 11. WHETHER PERMISSION UNDER SECTION 63 OF THE BOMBAY TENANCY AND AGRICULTURAL LANDS ACT, 1948, WAS OBTAINED BECAUSE THE SALE OR INTENDED SALE WAS IN FAVOUR OF A ON - AGRICULTURIST? IF SO, WHETHER THE SALE OR INTENDED SALE TO SUCH NO N - AGRICULTURIST WAS FOR NON - AGRICULTURAL OR AGRICULTURAL USER? ASSESSEE SOLD TO ONE 5MT. 5ANTHI FROM COIMBATORE. FROM THE IT RETURNS FILED IT IS SEEN THAT THE PURCHASER IS NOT AN AGRICULTURIST AND HAS NOT DECLARED ANY AGRICULTURAL INCOME. HENCE THE LAND WA S SOLD TO A NON - AGRICULTURIST SINCE NO AGRICULTURE WAS DONE ON THIS LAND AFTER THE LAND WAS SOLD IN FY 2011 - 12 TILL DATE. 12. WHETHER THE LAND WAS SOLD ON YARDAGE OR ON ACREAGE BASIS? LAND WAS SOLD ON ACREAGE BASIS. 13. WHETHER AN AGRICULTURIST WOULD P URCHASE THE LAND FOR AGRICULTURAL PURPOSES AT THE PRICE AT WHICH THE LAND WAS SOLD AND WHETHER THE OWNER WOULD HAVE EVER SOLD THE LAND VALUING IT AS A PROPERTY YIELDING AGRICULTURAL PRODUCE ON THE BASIS OF ITS YIELD? CONSIDERING THE FACT THAT THE LAND IS S ITUATED IN RAIN FED AREA, THE AVERAGE RETURNS FROM THE LAND COULD BE RS. 1,00,000 PER ACRE AND THE SALE PRICE WAS RS. 92,40,000/ - ACRE NO AGRICULTURIST WOULD HAVE PURCHASED THIS LAND FOR AGRICULTURAL I PURPOSES. THE EXPONENTIAL APPRECIATION IN THE VALUE OF LAND OVER A PERIOD OF 55 MONTHS CANNOT BE FOR AGRICULTURAL PURPOSES BUT FOR NON - AGRICULTURAL PURPOSES LIKE INDUSTRY, COMMERCIAL PURPOSES. ACCORDINGLY, THE LD. CIT(A) HAS HELD AS UNDER: 7.2 I HAVE CONSIDERED THE TESTS APPLIED BY THE ASSESSING OFFICER T O TREAT THE LAND AS NON AGRICULTURAL. IN ITEM NO. 5 WHETHER THE ASSESSEE OBTAINED PERMISSION FOR NON - AGRICULTURAL USE, THE ANSWER IS 'NO'. ITEM NO. 6 THE ASSESSING OFFICER CONTENDS THAT THE LAND WAS NOT USED FOR AGRICULTURAL PURPOSES FROM PURCHASE TILL DAT E. THIS ASPECT IS REBUTTED BY THE APPELLANT WITH EVIDENCE THAT MAIZE HAS BEEN GROWN. AS PER THE ITEM NO. 9 WHETHER THE LAND WAS DEVELOPED BY PLOTTING AND PROVIDING ROAD AND OTHER FACILITIES, THE ASSESSING OFFICER COMMENTED THAT THE LAND WAS NOT DEVELOPED I NTO ANY PLOTS. THE ASSESSING OFFICER I.T.A. NO . 39 6 /M/1 6 & C.O. NO. 55 /M/16 6 HAS ALSO STATED THAT THE ASSESSEE HAS NOT SOLD ANY PIECE OF LAND FOR NON - AGRICULTURAL PURPOSES. THE ASSESSING OFFICER HAS ADDED THAT THE ADJACENT LAND WHICH BELONGS TO THE ORIGINAL OWNER HAS BEEN PUT TO NON - AGRICULTURAL USE. WHAT IS DONE TO AN ADJACENT LAND CANNOT BE THE REASON FOR TREATING THIS AS NON - AGRICULTURAL. THE APPELLANT SAYS THAT THE LAND IS IN A PHYSICAL TERRAIN WHERE NON - AGRICULTURAL ACTIVITY CANNOT BE CARRIED OUT. CONSIDERING THE EVIDENCE FURNISHED BY THE AP PELLANT TO SHOW THAT THERE WAS AGRICULTURAL PRODUCTION IN THE LAND AND ALSO THE FACT THAT THE ASSESSING OFFICER HAS CLEARLY MENTIONED THAT THE LAND WAS NOT PUT TO NON - AGRICULTURAL USE THE ADDITION MADE TREATING THE INCOME FROM THE SALE OF LAND AS BUSINESS INCOME CANNOT BE SUSTAINABLE. IN THE SAID LAND THERE NON AGRICULTURAL ACTIVITY AND THE TESTS FOR TREATING THE LAND AS NON - AGRICULTURAL DOES NOT SEEM TO BE SATISFIED. 8.0 IN THE RESULT THE APPEAL IS ALLOWED. 5.1 WHETHER THE LAND USED FOR AGRICULTURAL PURP OSE OR NOT IS NOT THE MATERIAL FOR DETERMINING THE QUESTION WHETHER THE LAND WAS AGRICULTURAL LAND OR NOT. IN THE CASE OF CIT VS OFFICER - IN - CHARGE (105 ITR 133) HON'BLE SUPREME COURT HELD THAT AGRICULTURAL LAND MUST BE A LAND WHICH COULD BE SAID TO BE EITH ER ACTUALLY USED OR ORDINARILY USED OR MEANT TO BE USED FOR AGRICULTURAL PURPOSES, AND DETERMINATION OF THE CHARACTER OF LAND, ACCORDING TO THE PURPOSE FOR WHICH IT IS MEANT OR SET APART AND CAN BE USED, IS A MATTER OF WHICH HAVE TO BE DETERMINED ON THE FA CTS OF EACH PARTICULAR CASE. IN THE PRESENT CASE THERE WAS NO DOUBT WHATSOEVER, ON THE NATURE OF THE LAND BEING AGRICULTURAL LAND, EXCEPT IT IS FACT THAT THE ASSESSEE HAS NOT CLAIMED ANY AGRICULTURAL INCOME SINCE THE ASSESSEE HAS DONATED THE ENTIRE AGRICUL TURAL PRODUCE TO THE CHARITABLE TRUST [GOSHAALA]. UNDER THE PROVISIONS OF SECTION 133(6) OF THE ACT, THE I.T.A. NO . 39 6 /M/1 6 & C.O. NO. 55 /M/16 7 ASSESSING OFFICER HAS REQUESTED THE VILLAGE ADMINISTRATIVE OFFICER TO FURNISH THE CHITTA ADANGAL REPORT. THE CERTIFICATE FURNISHED BY THE V A O INDICATES THAT THE LANDS UNDER REFERENCE , SUBSTANTIAL PORTION OF THE LAND WAS LEFT FALLOW WHERE NO AGRICULTURAL OPERATIONS WERE CARRIED OUT BY THE ASSESSEE , WHICH DOES NOT MEAN THAT THE LAND IS NOT AN AGRICULTURAL LAND OR THE ASSESSEE HAS CARRIED OUT ANY NON - AGRICU LTURAL ACTIVITIES IN THAT LAND . FURTHER, THERE WAS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAS APPLIED FOR CHANGE OF THE LAND FOR NON - AGRICULTURAL PURPOSES. IN THIS CASE, IT MAY BE REASONABLE TO HOLD THAT THE A SSESSING O FFICER RELIED ON VARIOUS CASE LAWS RAT HER THAN CONSIDERING THE FACTS OF THE CASE UNDER REFERENCE AND EXAMINING THE APPLICABILITY OF THOSE CASE LAWS, TO THE FACTS OF THE CASE. THE LANDS HELD AND SOLD BY THE ASSESSEE WERE CERTIFIED AND PROVED TO BE AGRICULTURAL LANDS AS PER REVENUE RECORDS. JUST BECAUSE THE ASSESSEE HAS NOT SHOWN ANY AGRICULTURAL INCOME IN THE RETURNS EVER SINCE THE LAND WAS PURCHASED, OR EVEN NO AGRICULTURAL OPERATIONS WERE CARRIED OUT BY THE ASSESSEE, THE NATURE OF THE LAND SHALL NOT CHANGE UNTIL UNLESS, THE LAND IN QUESTION WA S SUBSEQUENTLY DEVELOPED FOR COMMERCIAL EXPLOITATION. FURTHER, THE NATURE OF THE LAND HAS NOT UNDERGONE A NY CHANGE, WITH THE LAND REVENUE TAX PAID BY THE ASSESSEE AND THE RECORDS STILL SHOWING THEM TO BE AGRICULTURAL LANDS. THE A SSESSING O FFICER HAS NOT BR OUGHT ANY EVIDENCE ON RECORD TO SHOW THAT THE LAND WAS DEVELOPED FO R COMMERCIAL EXPLOITATION, IN SPITE OF ITS PROXIMITY TO THE HIGH WAY AND I.T.A. NO . 39 6 /M/1 6 & C.O. NO. 55 /M/16 8 SURROUNDED BY INDUSTRIES/SCHOOL/COLLEGES, ETC. THUS, BASED ON THE FACTS OF THE CASE, IT IS REASONABLE TO HOLD THAT T HE LANDS UNDER REFERENCE ARE CONTINUED/REMAINED TO BE AGRICULTURAL LANDS , WHEN THE LAND WAS NOT PUT TO NON - AGRICULTURAL USE WITHOUT ANY CONVERSION OF SUCH LANDS INTO FURTHER DEVELOPMENTS SUCH AS COMMERCIALISATION / PLOTTING OF LANDS, DO NOT AMOUNT TO ADVEN TURE IN NATURE OF TRADE. THE SALE OF LAND , IRRESPECTIVE OF THEIR VALUE, AS LONG AS THE SAID ASSETS / LANDS DID NOT LOSE THE BASIC CHARACTER OF AGRICULTURAL LANDS, DOES NOT CONSTITUTE BUSINESS ACTIVITY OF THE ASSESSEE . 5.2 IN THE CASE OF RAJA J. RAMESHWAR, RAO V. CIT [1961] 42 ITR 179, THE HON BLE SUPREME COURT HAS OBSERVED AS UNDER (HEADNOTE): IN THE HEADNOTE OF THE DECISION, THE FOLLOWING IS WHAT WAS ACTUALLY STAT ED, BUT WHILE RELYING ON THE DECISION, THE ASSESSING OFFICER HAS SIMPLY IGNORED THE SECOND SENTENCE OF THE HEADNOTE: EVEN A SINGLE VENTURE MAY BE REGARDED AS IN THE NATURE OF TRADE OR BUSINESS. WHEN A PERSON ACQUIRES LAND WITH A VIEW TO SELLING IT LATER A FTER DEVELOPING IT, HE IS CARRYING ON AN ACTIVITY RESULTING IN PROFIT, AND THE ACTIVITY CAN ONLY BE DESCRIBED AS A BUSINESS VENTURE. WHERE THE PERSON GOES FURTHER AND DIVIDES THE LAND INTO PLOTS, DEVELOPS THE AREA 'TO MAKE IT MORE ATTRACTIVE AND SELLS THE LAND NOT AS A SINGLE UNIT AND AS HE BOUGHT IT, BUT IN PARCELS, HE IS DEALING WITH LAND AS HIS STOCK - IN - TRADE; HE IS CARRYING ON BUSINESS AND MAKING A PROFIT. IN THE PRESENT CASE, THE ASSESSEE HAS NOT CARRIED OUT ANY NON - AGRICULTURAL OPERATION SUCH AS DEVELOPING THE LAND BY PLOTTING AND PROVIDING ROADS AND OTHER FACILITIES AND MOREOVER, THE ASSESSEE SOLD THE I.T.A. NO . 39 6 /M/1 6 & C.O. NO. 55 /M/16 9 LAND ON ACREAGE BASIS AND NOT YARDAGE BASIS. THEREFORE, THE CASE LAW RELIED ON BY THE DEPARTMENT HAS NO APPLICATION TO THE FACTS OF THE PRESENT CAS E. 5.3 THE OTHER CASE LAW RELIED ON BY THE DEPARTMENT IN THE CASE OF CIT V. NARASIMHA REDDY, NO CITATION HAS BEEN QUOTED EITHER BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER OR THE DEPARTMENT IN THE STATEMENT OF FACTS FILED IN ITS APPEAL. THUS, THE SAME STANDS REJECTED. 5. 4 ACCORDINGLY , THE ADDITION ON ACCOUNT OF TREATING THE GAINS TO THE ASSESSEE ON SALE OF LANDS, AS BUSINESS INCOME IS NOT SUSTAINABLE, SINCE THE LANDS UNDER REFERENCE WERE HELD TO B E AGRICULTURAL LANDS, AND THE A CTIVITIES OF PURCHASE AND SALE OF SUCH AGRICULTURAL LAND, IN OUR OPINION DID NOT CONSTITUTE BUSINESS. THUS, WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE AND ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 6 . IN THE CROSS OBJECTION FILED BY THE ASSESSEE, THE ASSESSEE HAS STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A) AND NO NEW GROUND HAS BEEN RAISED FOR ADJUDICATION . SINCE WE HAVE CONFIRMED THE ORDER PASSED BY THE LD. CIT(A) AND DISMISSED THE AP PEAL FILED BY THE REVENUE, THE CROSS OBJECTION FILED BY THE ASSESSEE BECOME INFRUCTUOUS AND ACCORDINGLY DISMISSED. I.T.A. NO . 39 6 /M/1 6 & C.O. NO. 55 /M/16 10 7 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THE 30 T H NOVEMBER , 201 6 AT CHENNAI. SD/ - SD/ - (A.MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 30 . 11 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.