ACIT, Jaipur V. SHRI SUNIL BANSAL, Jaipur

ITA 523/JPR/2012

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5550 (ITAT-JAIPUR)
• Duration Of Justice: 6 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 30-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Assessee Lawyers: RAJIV SOGANI C A DHK
• Keywords: Capital asset; Business income; Search and seizure; Salary income; Earning of tax free income; Question of law; Cost of acquisition; Set aside; Capital Gains
• Section: 2(14); 63; 28

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S B, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 523/JP/2012 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2008-09 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3, JAIPUR. CUKE VS. SUNIL BANSAL, P/O- M/S S.S. CONSULTANT, B-31 & 36, KESHAV PATH, SURAJ NAGAR (WEST), CIVIL LINES, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAZPB 8922 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJIV SOGANI (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14/09/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 06/11/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 12/03/2012 OF LD. CIT(A)-I, JAIPUR FOR THE A.Y. 200 8-09. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN:- (I) DELETING THE ADDITION OF RS. 2,22,38,555/- ON A CCOUNT OF BUSINESS PROFIT FROM SALE OF LAND, EVEN THOUGH THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. (II) HOLDING THAT NO CAPITAL GAIN WAS CHARGEABLE AS THE ASSET REFERRED WAS AGRICULTURAL LAND, IGNORING THE FACTS THAT THE ASSESSEE WAS NOT ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 2 PERFORMING ANY AGRICULTURAL ACTIVITIES AND NO AGRIC ULTURAL INCOME WAS SHOWN IN THE RETURN. 2. THE ASSESSEE IS INDIVIDUAL AND ENGAGED IN THE BUS INESS OF TRADING OF EXPORT AND IMPORT SCRIPS AND BROKERAGE UNDER THE NA ME AND STYLE OF M/S S.S. CONSULTANTS. THE ASSESSEE ALSO DERIVES INCOME FROM SALARY AND HOUSE PROPERTY. THE ASSESSEE FILED HIS RETURN OF INCOME ON 19/3/2009 DECLARING TOTAL INCOME OF RS. 68,91,170/-. THE ASSESSEE IS WORK ING AS DIRECTOR OF M/S GRASS FIELD FARMS AND RESORTS PVT. LTD. AND M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD.. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS PURCH ASED 16 LANDS AND ALSO SOLD 16 LANDS DURING THE YEAR UNDER CONSIDERAT ION. THUS, THE ASSESSING OFFICER FOUND THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS PURCHASED LAND AMOUNTING TO RS. 1,32,9 8,540/- AND SOLD THE LANDS AMOUNTING TO RS. 2,69,85,258/-. THE ASSESSEE A PPENDED A NOTE TO THE COMPUTATION OF INCOME AND EXPENDITURE THAT HE H AS SOLD THE AGRICULTURAL LAND SITUATED IN DIFFERENT VILLAGES TO M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. AND M/S GRASS FIELD FI RE LAND DEVELOPERS PVT. LTD. FOR A CONSIDERATION OF RS. 2,29,01,000/- WHICH WAS PURCHASED FOR A SUM OF RS. 34,29,000/-. THE ASSESSEE CLAIMED THAT TH E LANDS SOLD DURING THE YEAR DOES NOT FALL IN THE AMBIT OF CAPITAL ASSE T AS PER SECTION 2(14) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AND THER EFORE, SURPLUS OF RS. ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 3 1,94,72,000/- GENERATED FROM THE TRANSFER OF THE LA ND IS EXEMPT FROM INCOME TAX. THE ASSESSING OFFICER DID NOT ACCEPT TH IS CONTENTION OF THE ASSESSEE AND NOTED THAT THE ASSESSEE HAS PURCHASED THESE LANDS IN HIS OWN NAMES AND INDIVIDUAL CAPACITY AND THEREAFTER SOL D THE SAME TO THE COMPANY I.E. M/S GRASS FIELD FIRE CAPITAL DEVELOPER S PVT. LTD. AND M/S GRASS FIELD FIRE LAND DEVELOPERS PVT. LTD. BY EXECU TING SEPARATE SALE DEEDS. SINCE THERE ARE SERIES OF TRANSACTIONS OF PU RCHASES AS WELL AS SALES, THEREFORE, THE ASSESSING OFFICER TREATED THE ACTIVI TY OF PURCHASE AND SALE OF LAND BY THE ASSESSEE AS BUSINESS OF THE REAL EST ATE, ACCORDINGLY, THE SURPLUS EARNED BY THE ASSESSEE FROM THE SALE OF THE LAND WAS TREATED BY THE ASSESSING OFFICER AS BUSINESS INCOME AND ASSESS ED TO TAX. HENCE, THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS. 2,22, 38,555/- AS PROFIT EARNED FROM THE BUSINESS ACTIVITY OF PURCHASE AND S ALE OF LAND. 3. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSI NG OFFICER BEFORE THE LD. CIT(A) AND CONTENDED THAT THE LANDS PURCHASE D BY THE ASSESSEE IS IN THE NATURE OF INVESTMENT AND THEREFORE, SURPLUS/ GAIN ARISING FROM SALE OF THESE LANDS IS CAPITAL GAIN, HOWEVER, SINCE THESE AGRICULTURAL LANDS ARE SITUATED BEYOND 8 K.M. FROM THE MUNICIPAL LIMITS, T HEREFORE, THE SAME DOES NOT FALL IN THE DEFINITION OF CAPITAL ASSET AN D CONSEQUENTLY THE SURPLUS ARISING FROM SALE OF THESE LANDS IS NOT CHARGEABLE TO TAX. THE LD. CIT(A) ACCEPTED THE CLAIM OF THE ASSESSEE AND TREATED THE TRANSACTION AS ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 4 INVESTMENT IN THE LANDS AND CONSEQUENTLY THE ADDITI ON MADE BY THE ASSESSING OFFICER WAS DELETED BY THE LD. CIT(A) ON T HE GROUND THAT THE AGRICULTURAL LANDS IN QUESTION ARE SITUATED BEYOND 8 K.M. FROM THE MUNICIPAL LIMITS AND THEREFORE, THE LANDS TRANSFERR ED BY THE ASSESSEE DURING THE YEAR WERE NOT CAPITAL ASSET U/S 2(14)(III ) OF THE ACT. 4. AGGRIEVED BY THE IMPUGNED ORDER OF THE LD. CIT(A) , THE REVENUE HAS FILED THE PRESENT APPEAL. 5. BEFORE US, THE LD DR HAS SUBMITTED THAT THE ASSE SSEE HAS PURCHASED AS MANY AS 16 LANDS DURING THE YEAR UNDER CONSIDERATION AND AN EQUAL AMOUNT OF TRANSACTION OF SALE, THEREFORE, THE ACTIVITY OF PURCHASE AND SALE OF THE LAND BY THE ASSESSEE IS SYSTEMATIC AND WITH THE MOTIVE TO SELL FOR EARNING PROFITS. HE HAS FURTHER CONTENDED THAT THE ASSESSEE BEING THE DIRECTOR OF M/S GRASS FIELD FARMS AND RESORTS P VT. LTD. AND M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. HAS PURCHAS ED THESE LANDS WITH THE PURPOSE TO SELL THE SAME TO THE COMPANIES OWNED BY T HE ASSESSEE. THEREFORE, THE ENTIRE EXERCISE OF PURCHASE AND SALE WAS TO INFLATE THE COST OF ACQUISITION IN THE HAND OF THESE TWO COMPANIES TO AVOID THE TAX LIABILITY AS THE ASSESSEE HAS CLAIMED THE HUGE SURPLUS IN THE TRANSACTION OF PURCHASE AND SALE AS EXEMPT FROM TAX. THUS, THIS IS A DEVICE TO AVOID THE TAX BY INFLATING THE COST OF ACQUISITION IN THE HAN D OF THE COMPANIES AND ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 5 CLAIMING THE SURPLUS AS EXEMPT IN THE HAND OF THE A SSESSEE. THE LD DR HAS SUBMITTED THAT THE LD. CIT(A) HAS COMMITTED AN ERROR WHILE HOLDING THAT THE LANDS IN QUESTIONS ARE HELD BY THE ASSESSE E AS CAPITAL ASSET AND NOT CONVERTED INTO STOCK IN TRADE WHEREIN THE ASSESS EE HAS NOT BEEN MAINTAINING REGULAR BOOKS OF ACCOUNT AND THEREFORE, THE QUESTION OF HOLDING THESE LANDS AS CAPITAL ASSET AND NOT AS A S TOCK IN TRADE CANNOT BE DECIDED BASED ON THE BOOKS OF THE ASSESSEE. HE HAS FURTHER CONTENDED THAT WHEN THE ASSESSEE HAS CLAIMED THE INCOME AS EX EMPT THEN THE ONUS IS ON THE ASSESSEE TO PROVE THAT THE ACTIVITY CARRI ED OUT BY THE ASSESSEE IS NOT BUSINESS ACTIVITY. IN SUPPORT OF HIS CONTENTION , HE HAS RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F KHAN BAHADUR AHMED ALLADIN & SONS VS . COMMISSIONER OF INCOME-TAX 68 ITR 573 AND SUBMITTED THAT WHEN THE ACTIVITY OF PURCHASE AND SAL E IS WELL PLANNED AND UNDER CALCULATED SCHEME OF PROFIT MAKING WITH THE IN TENTION TO EXPLOIT THE PROPERTIES THEN THE TRANSACTION CONSTITUTE AN ADVEN TURE IN THE NATURE OF TRADE AND ANY SURPLUS GOT BY SALE OF THE PROPERTY I S LIABLE TO TAX AS BUSINESS INCOME. HE HAS ALSO RELIED UPON THE DECISI ON OF PUNE BENCHES OF THE TRIBUNAL IN THE CASE OF DILIP BATTU KARANJULE VS ITO 161 ITD 172 (PUNE TRIB) AS WELL AS DECISION OF MUMBAI BENCHES OF THE TRIBUNAL DATED 18/7/2012 IN THE CASE OF ITO VS. RATANSHI MULJI PATE L IN ITA NO. 5499/MUM/2011. THE LD. DR HAS RELIED UPON THE DECISI ON OF THE HONBLE ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 6 M.P. HIGH COURT IN THE CASE OF BHAGIRATH PRASAD BIL GAIYA VS CIT 139 ITR 916 (MP) AND THE DECISION OF THE HONBLE GUJARAT HI GH COURT IN THE CASE OF HEMACHAND HIRACHAND SHAH VS CIT 206 ITR 55 (GUJ). HENCE, THE LD DR HAS SUBMITTED THAT WHEN THE ACTIVITY OF PURCHASE AND SALE OF LAND IS SYSTEMATIC AND WELL PLANNED WITH THE MOTIVE TO EARN T HE PROFIT BY SALE OF THE LANDS ON A HIGHER PRICE TO THE COMPANIES THEN I T IS NOT AN INVESTMENT BUT IT IS IN THE NATURE OF ADVENTURE AND THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY TREATED THE SAME AS BUSINESS ACTIVITY A ND ASSESSED THE SURPLUS ARISING FROM THE SAME AS BUSINESS INCOME OF THE ASS ESSEE. 5.1 AS REGARDS THE LAND IN QUESTION NOT CAPITAL ASS ET U/S 2(14)(III) OF THE ACT, THE LD. DR HAS SUBMITTED THAT WHEN THE ASS ESSEE HAS PURCHASED THE LAND FOR RESALE PURPOSE THEN THE LANDS LOSES IT S CHARACTER OF AGRICULTURAL LANDS. FURTHER THE ASSESSEE HAS NOT PR ODUCED ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS CARRIED OUT AGRICULTURAL OPERATIONS ON THESE LANDS AS NO AGRICULTURAL INCOME DISCLOSED BY THE AS SESSEE. EVEN OTHERWISE, THE ASSESSEE IS IN THE BUSINESS OF TRADIN G AND NOT AN AGRICULTURIST THEN THE VERY PURPOSE OF PURCHASE OF A AGRICULTURAL LAND WAS TO SELL ON A HIGHER PRICE TO THE COMPANY FOR NON-AG RICULTURAL PURPOSE. ONCE THE LAND WAS PURCHASED FOR RESALE AND NON-AGRIC ULTURAL PURPOSES THEN THE BENEFIT FOR EXEMPTION U/S 2(14) OF THE ACT CANNOT BE CLAIMED ON SUCH LAND THOUGH IT IS SHOWN AS AGRICULTURAL LAND IN THE REVENUE RECORD. ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 7 THE LD DR HAS RELIED UPON THE DECISION OF THE HON'BL E SUPREME COURT DATED 19/11/1997 IN THE CASE OF STATE OF U.P. VS. N AND KUMAR AGGARWAL & ORS. AND SUBMITTED THAT THE HON'BLE SUPREME COURT HAS HELD THAT IT IS NOT ENOUGH IF THE LAND IS ENTERED IN REVENUE RECORD AS AGRICULTURAL LAND BUT IT IS BEING USED FOR THE PURPOSE OF AGRICULTURE AND MAINLY USED FOR THE PURPOSE OF AGRICULTURE TO HOLD THAT THE LAND IS AGR ICULTURAL LAND. HE HAS ALSO RELIED UPON THE DECISION OF HON'BLE SUPREME CO URT IN THE UNION OF INDIA VS S. MUTHYAM REDDY 106 TAXMAN 501 (SC) AND SU BMITTED THAT THE DECISIONS WHICH WERE RELIED UPON BY THE ASSESSEE AS W ELL AS BY THE LD. CIT(A) WHILE PASSING THE IMPUGNED ORDER WERE SET ASIDE BY THE HON'BLE SUPREME COURT. THUS, HE HAS SUBMITTED THAT WHEN THE ASSESSEE PURCHASED THE LANDS NOT FOR CARRYING THE AGRICULTUR E OPERATIONS BUT TO RESALE THE SAME FOR NON-AGRICULTURAL PURPOSES THEN THE LAND IN QUESTION CANNOT BE TREATED AS AGRICULTURAL LAND AND THEREFOR E, EVEN IF THE LANDS ARE SITUATED BEYOND A DISTANCE OF MORE THAN 8 K.M. FROM THE MUNICIPAL LIMITS, IT WILL NOT GET THE BENEFITS OF SECTION 2(14)(III) O F THE ACT. HE HAS SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 6. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE LANDS SOLD BY THE ASSESSEE DURING THE YEAR UNDE R CONSIDERATION WERE AGRICULTURAL LAND AND SITUATED BEYOND 8 K.M. FROM T HE MUNICIPAL LIMITS AND THEREFORE, THE SAME WERE NOT CAPITAL ASSET WITHIN THE MEANING OF SECTION ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 8 2(14) OF THE ACT. THE LD AR HAS FURTHER CONTENDED T HAT THE ASSESSEE SOLD THE LANDS TO THE COMPANIES AGAINST THE EQUITY SHARE S ALLOTTED AND NOT AGAINST THE CASH CONSIDERATION, THEREFORE, ONE CAPI TAL ASSET AND INVESTMENT WAS CONVERTED INTO ANOTHER INVESTMENT AND HENCE THE ACTIVITY OF PURCHASE AND SALE IS NOT BUSINESS ACTIVITY BUT I T WAS INVESTMENT IN THE CAPITAL ASSET BY THE ASSESSEE. HE HAS FURTHER CONTE NDED THAT THE ASSESSEE PAID STAMP DUTY AT THE TIME OF PURCHASE AND THEREFO RE, IT SHOWS THE INTENTION OF THE ASSESSEE TO PURCHASE THE LAND AS A N INVESTOR AS AGAINST THE TRADER WHO GENERALLY DOES NOT PAY THE STAMP DUTY BUT ACQUIRED THE LANDS ON THE BASIS OF THE AGREEMENT TO SELL AND THE N THE SELL THE SAME WITHOUT PAYMENT OF STAMP DUTY TWICE. THEREFORE, IT IS AN INVESTMENT IN LAND. THE LD AR HAS POINTED OUT THAT THE ASSESSING O FFICER HAS ACCEPTED THE SALE OF AGRICULTURAL LAND BY THE COMPANY M/S GR ASS FIELD FARMS & RESORTS PVT. LTD. WHILE PASSING THE ASSESSMENT U/S 1 43(3) DATED 27/12/2010 FOR THE A.Y. 2008-09. THEREFORE, IN A SIM ILAR NATURE OF TRANSACTION, THE ASSESSING OFFICER HAS ACCEPTED THE TRANSACTION AS SALE OF AGRICULTURAL LAND NOT LIABLE TO TAX. THE ASSESSEE HA S BEEN CONSISTENTLY MADE INVESTMENTS IN THE LAND FOR THE F.Y. 2003-04 A ND RETAINED A PORTFOLIO OF LAND. THE ASSESSEE DID NOT BORROW FUND TO MAKE THE INVESTMENT IN LAND, THEREFORE, IT WAS AN INVESTMENT FROM ASSESSEES OWN FUNDS. THE REVENUE HAS NOT DISPUTED THAT THE LANDS I N QUESTION ARE ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 9 SITUATED BEYOND 8 K.M. FROM THE MUNICIPAL LIMITS AN D WERE NOT CONVERTED INTO STOCK IN TRADE BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT AS PER P&L ACCOUNT. THE INVESTMENT IN LAND HAS NO CONNECTION WHA TSOEVER WITH THE ORDINARY COURSE OF BUSINESS OF THE ASSESSEE, WHICH W AS THAT OF CONSULTANCY OF IMPORT AND EXPORT LICENSES, THEREFOR E, THE TRANSACTIONS WERE NOT ORDINARY LINE OF ASSESSEES BUSINESS. THE A SSESSEE HAS NOT CARRIED OUT ANY IMPROVEMENT OR DEVELOPMENT WORK PRIO R TO THE SALE OF THE LAND AND EVEN THE CONVERSION CHARGES WERE PAID SUBSE QUENTLY BY THE COMPANY I.E. THE PURCHASER. WHEN THE ASSESSEE HAS N OT DONE ANY ACT FOR ENHANCEMENT OF THE VALUE OF THE LAND THEN IT IS A S IMPLE TRANSACTION OF INVESTMENT AND THE SURPLUS ARISING FROM THE SALE OF THE LANDS IS CAPITAL GAIN WHICH IS NOT CHARGEABLE TO TAX IN VIEW OF SECTIO N 2(14)(III) OF THE ACT. IN SUPPORT OF THIS CONTENTION, THE LD AR HAS RELIED UPON THE FOLLOWING DECISIONS: 1. J. RAGHOTTAMA REDDY VS. ITO (1988) 169 ITR 174. 2. HARRISONS MALAYALAM LTD. VS. ACIT (2009) 32 SOT 497. 3. AGRI GOLD FOODS & FARM PRODUCTS LTD. VS CIT, ITA NO. 451/VIZAG/2012 ORDER DATED 30/07/2014. 4. ACIT VS. NILGIRI TEA ESTATE LTD. (2014) 47 TAXMAN N.COM 329 (COCHIN TRIB). 5. SINGHAI RAKESH KUMAR VS UNION OF INDIA (2001) 11 5 TAXMAN 101 (SC). ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 10 6. MANUBHAI A. SHETH VS N.D. NIRGUDKAR, SECOND ITO 128 ITR 87 (BOM). 7. ACIT VS. M/S FOCAL POINT BUILDERS & PROMOTERS PV T. LTD. ITA NO. 759/JP/2012 ORDER DATED 31/03/2016. 8. RAJA BAHADUR KAMAKHYA NARAIN SINGH VS CIT (1970) 77 ITR 253 (SC) 9. CIT VS. SMT. DEBBIE ALAMAO (2011) 196 TAXMAN 230 (BOM). 10. ACIT VS ATMA RAM GUPTA ITA NO. 529/JP/2012 ORDE R DATED 29/05/2015. HE HAS FURTHER SUBMITTED THAT EVEN OTHERWISE THE INC OME ARISING FROM SALE AND TRANSFER OF AGRICULTURAL LAND IS AN AGRICU LTURAL INCOME AS PER SECTION 2(1A) OF THE ACT. THUS, THE LD AR HAS SUBMIT TED THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MANUBHAI A. SHETH VS. N.D. NIRGUDKAR (SUPRA) HAS HELD THAT PROFIT OR GAIN ARISING FROM T RANSFER OF LAND USED FOR AGRICULTURAL PURPOSES IS AN AGRICULTURAL INCOME NOT TO BE INCLUDED IN THE TOTAL INCOME. A SIMILAR VIEW HAS BEEN TAKEN BY THE H ONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF J.RAGHOTTAMA REDD Y VS ITO (SUPRA). THUS, THE HON'BLE HIGH COURTS HAVE HELD THAT THE CAP ITAL GAINS MADE ON SALE OF LANDS USED FOR AGRICULTURAL PURPOSES WOULD B E REVENUE DERIVED FROM SUCH LAND AND THEREFORE, AGRICULTURAL INCOME WI THIN THE MEANING OF SECTION 2(1A) OF THE ACT. CONSEQUENTLY, THE SAID IN COME IS NOT LIABLE TO INCOME TAX. THE LD AR HAS FURTHER SUBMITTED THAT THE DECISIONS RELIED UPON BY THE LD DR ARE DISTINGUISHABLE ON FACTS AND NOT APPLICABLE TO THE ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 11 FACTS OF THE ASSESSEE WHEN THE ASSESSEE HAS NOT DONE ANY IMPROVEMENT OR DEVELOPMENT OF THE LAND BEFORE SALE. HE HAS FURT HER SUBMITTED THAT EVEN THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. S. MUTHYAM REDDY (SUPRA) HAS CONSIDERED ONLY THE AMEND MENT BROUGHT TO SECTION 2(1A) OF THE ACT BY WAY OF INSERTION OF EXPL ANATION BY THE FINANCE ACT, 1989 AND THEREFORE, ONLY TO THE EXTENT, THE AG RICULTURAL LANDS FALLING WITHIN THE MUNICIPAL LIMITS OR WITHIN 8 K.M. FROM THE MUNICIPAL LIMITS WILL NOT BE TREATED AS AGRICULTURAL INCOME. THUS, THE LD AR HAS SUBMITTED THAT THE SAID DECISION OF THE HON'BLE SUPREME COURT DOES NOT UPSET THE FINDING ON THE POINT THAT THE LANDS WHICH ARE SITUATED BEYON D THE DISTANCE OF 8 K.M. FROM MUNICIPAL LIMIT AS PER SECTION 2(14)(III) OF THE ACT ARE NOT CAPITAL ASSET AND CONSEQUENTLY THE INCOME FROM SALE OF SUCH LANDS ARE NOT TAXABLE BEING AGRICULTURAL INCOME. HE HAS SUPPORTED THE IMPUGNED ORDER OF THE LD. CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE FIRST ISSUE ARISES FOR OUR C ONSIDERATION AND ADJUDICATION IS WHETHER THE TRANSACTION OF PURCHASE AND SALE CARRIED OUT BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION ARE IN THE NATURE OF TRADE AND CONSEQUENTLY THE SURPLUS/GAIN ARISING FRO M SALE OF THE LANDS IS IN THE NATURE OF BUSINESS INCOME OR IT IS CAPITAL G AIN. THE DETAILS OF ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 12 PURCHASE AND SALE OF THE LANDS ARE GIVEN BY THE ASS ESSING OFFICER IN PARA 2 OF THE ASSESSMENT ORDER AS UNDER: S. NO. NAME OF THE SELLER DATE OF REGISTRATION OF PURCHASE DEED AMOUNT DESCRIPTION OF LAND PURCHASED 1. RAMNIWAS, RAMPAL 17/05/2007 RS. 21,50,200/ - KHASRA NO. 424/5 2. RAMBABU KASANA 04/06/2007 RS. 6,04,900/ - KHASRA NO. 424/5 3. RAMKARAN 11/04/2007 RS. 4,63,450/ - KHASRA NO. 42/65 4 . SHRI RAJ KISHOR GOTHWAL 28/05/2007 RS. 90,75,000/ - KHASRA NO. 825/1/6/7/8 5. KIRTIRAJ HANDIA 25/05/2007 RS. 9,65,790/ - KHASRA NO. 522/4 6. RAJKISHORE GOTHWAL 25/05/2007 RS. 2,86,180/ - KHASRA NO. 365 7. DINANATH/SITARAM NAGAR 31/05/2007 RS. 57,275/ - K HASRA NO. 542 8. DINANATH/SITARAM NAGAR 31/05/2007 RS. 1,93,455/ - KHASRA NO. 553 9. TEJ SINGH 13/08/2007 RS. 1,08,040/ - KHASRA NO. 1504 10. BHAGWAT 24/10/2007 RS. 1,40,200/ - KHASRA NO. 1505 11. RAJKISHORE GOTHWAL 28/05/2007 RS. 32,30,025/ - KHASRA NO. 8 25/1/6 12. RAJKISHORE GOTHWAL 28/05/2007 RS. 32,30,025/ - KHASRA NO. 825/1/7 13. RAJKISHORE GOTHWAL 28/05/2007 RS. 32,30,030/ - KHASRA NO. 825/1/8 14. RAMNIWAS/RAMPAL 31/05/2007 RS. 21,50,200/ - KHASRA NO. 424/5 15. RAMBABU 04/06/2007 RS. 6,04,900/ - KHASR A NO. 424/5 16. LADI & CHITTAR 09/06/2005 RS. 10,04,990/ - KHASRA NO. 825/1/3 S. NO. NAME OF THE PURCHASER DATE OF REGISTRATION OF SALE DEED AMOUNT DESCRIPTION OF LAND SOLD 1. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/06/2007 RS. 70,50,000/ - KHASRA NO. 424/5 2. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/06/2007 RS. 24,46,362/ - KHASRA NO. 47 3. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/06/2007 RS. 11,04,808/ - KHASRA NO. 52 4. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/07/2007 RS. 18,18,832/ - KHASRA NO. 520/ - 5. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/07/2007 RS. 6,21,477/ - KHASRA NO. 501 ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 13 6. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/07/2007 RS. 1168151/ - KHASRA NO.504 7. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/07/2007 RS. 973459 KHASRA NO. 446 8. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/07/2007 RS. 973459/ - KHASRA NO. 446 9. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/07/2007 RS. 614816/ - KHASRA NO. 44 8 10. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/07/2007 RS. 6,14,816/ - KHASRA NO. 448 11. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/07/2007 RS. 6,66,250/ - KHASRA NO. 73 12. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/07/20 07 RS. 21,05,350/ - KHASRA NO. 74 13. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 13/07/2007 RS. 1,33,250/ - KHASRA NO. 75 14. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 17/08/2007 RS. 14,58,571/ - KHASRA NO. 42 15. M/S GRASS FIELD FIRE LAND DEVELOPERS PVT. LTD. 17/08/2007 RS. 11,51,504/ - KHASRA NO. 65 16. M/S GRASS FIELD FIRE CAPITAL DEVELOPERS PVT. LTD. 30/05/2007 RS. 40,83,750/ - KHASARA NO. 825/1/3 THERE IS NO DISPUTE THAT THERE ARE 16 TRANSACTIONS O F PURCHASE OF THE LANDS DURING THE FINANCIAL YEAR RELEVANT TO THE ASS ESSMENT YEAR UNDER CONSIDERATION AND EQUAL NUMBER OF TRANSACTIONS OF S ALE BY THE ASSESSEE. ON CAREFUL ANALYSIS OF THESE DETAILS, IT COULD BE N OTED THAT SOME OF THE LANDS PURCHASED DURING THE YEAR WERE ALSO SOLD DURIN G THE SAME YEAR AND EVEN WITHIN A PERIOD OF LESS THAN ONE MONTH. IT IS E VIDENT FROM THESE ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 14 DETAILS THAT THE LAND PURCHASED DURING THE YEAR BEA RING KHASRA NO. 424/5 ON 31/5/2007 WAS SOLD ON 30/6/2007. THEREFORE, THE SA ID SALE WAS WITHIN A PERIOD OF 13 DAYS FROM THE DATE OF PURCHASE. SIMI LARLY SOME OF THE OTHER TRANSACTIONS OF LAND BEARING KHASARA NO. 42 AND 65 WERE ALSO SOLD WITHIN A PERIOD OF FOUR MONTHS FROM THE DATE OF PURCHASE. THUS, IT IS DISCERNABLE FROM THE NUMBER OF TRANSACTIONS CARRIED OUT BY THE ASSESSEE ONE AFTER ANOTHER DURING THE YEAR UNDER CONSIDERATION AND THE PERIOD OF HOLDING IS LESS THAN MONTH AND IN SOME CASES WITHIN FEW MONTHS WH ICH CANNOT BE ON THE FACE OF IT REGARDED AS INVESTMENTS MADE BY T HE ASSESSEE IN AGRICULTURAL LANDS. THE INTENTION OF THE ASSESSEE F OR PURCHASE OF THE LAND IS ALSO NOT IN DISPUTE THAT IT WAS FOR RESALE AND WIT HIN A SHORT PERIOD OF TIME THOUGH THE SALE IS ONLY TO THE COMPANIES OF WH ICH THE ASSESSEE IS A DIRECTOR. THUS, IT IS APPARENT THAT THE ASSESSEE WAS ACTING AS AN INTERFACE TO PURCHASE THE LANDS FROM THE LAND OWNERS AND THEN CONVERTED IN NON- AGRICULTURAL USE AND SOLD TO THESE COMPANIES WHO ARE IN THE BUSINESS OF REAL ESTATE. THE LD AR HAS RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RAJA BAHADUR KAMAKHYA NARAIN SINGH VS CIT (SUPRA) AND SUBMITTED THAT WHEN THE ASSESSEE HAS RECEIVED THE CONSIDERATION IN THE SHAPE OF EQUITY SHARES OF THES E COMPANIES THEN IT IS A CONVERSION OF INVESTMENT IN LAND INTO INVESTMENT IN SHARES AND CANNOT BE TREATED AS BUSINESS ACTIVITY, HOWEVER, IN OUR CONSID ERED VIEW THE SAID ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 15 DECISION CANNOT BE APPLIED TO THE FACTS OF THE PRES ENT CASE AS IN THE SAID CASE, THE ASSESSEE INITIALLY PURCHASED THE GOVERNME NT SECURITIES AND ON SALE OF THE GOVERNMENT SECURITIES, THE ASSESSEE DEP OSITED THE AMOUNT IN THE BANK AND THE GAIN ARISING FROM THE SAID SALE OF GOVERNMENT SECURITIES WAS ASSESSED BY THE ASSESSING OFFICER AS BUSINESS IN COME. HOWEVER, THE TRIBUNAL REVERSED THE FINDING BY HOLDING THE SAME AS SALE OF CAPITAL ASSET. SUBSEQUENTLY THE ASSESSEE IN THE SAID CASE PURCHASE D SHARES AND DEBENTURES OUT OF THE SALE PROCEEDS OF GOVERNMENT S ECURITIES AND THEREAFTER THOSE SHARES WERE ALSO SOLD AND GOLD WAS P URCHASED. THE TRANSACTIONS RUN THROUGH THE YEARS FROM 1938-39 TO 1941-42 AND FOR INITIAL YEARS, THE TRIBUNAL HAS HELD THAT THE SURPLUS AMOUNT WAS CAPITAL GAIN AND NOT BUSINESS PROFITS. HOWEVER, WHEN THE ASSESSEE SUB SEQUENTLY SOLD THE SECURITIES AND GOLD WITHIN A SHORT SPAN OF TIME THE N THE TRIBUNAL HAS HELD THAT THE ASSESSEE WAS DEALING IN SHARES AND SO AS I N GOLD AND CONFIRMED THE ORDERS OF THE INCOME TAX OFFICER REJECTING THE A SSESSEES CASE THAT THE GOLD WAS PURCHASED BY HIM OWING TO THE WAR CRISIS AND SOLD BY HIM ON THE ACCOUNT OF PRESSING NECESSITIES. THUS, CONSIDERI NG ALL THESE PECULIAR FACTS OF THE SAID CASE, THE HON'BLE SUPREME COURT H AS HELD THAT THE TRANSACTIONS WERE IN THE NATURE OF MERE CHANGE IN TH E INVESTMENT CARRIED OUT FROM ONE FORM TO ANOTHER FORM. IN THE CASE IN H AND, IT IS NOT A SINGLE INVESTMENT AND THEN THE SAME INVESTMENT WAS CHANGED IN ANOTHER ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 16 INVESTMENT BUT THE ASSESSEE HAS CARRIED OUT REPEATE D TRANSACTIONS OF PURCHASE AND SALES AND NOT THE TRANSACTION OF ENTIR E PURCHASE AND THEN ENTIRE SALE. THE DETAILS OF THE PURCHASE AND SALE CL EARLY MANIFEST THE PATRON IN WHICH THE ASSESSEE HAS CARRIED OUT THE TRA NSACTIONS WITH THE SOLE PURPOSE OF SELLING THE LAND PURCHASED ONE AFTE R ANOTHER AND IN BETWEEN PURCHASING ANOTHER LANDS, THEREFORE, THESE T RANSACTIONS ARE NOT IN THE NATURE OF INVESTMENT MADE BY THE ASSESSEE IN ONE LOT AND THEN AFTER A CONSIDERABLE PERIOD OF TIME, THE ASSESSEE H AS SOLD THE LAND AND EARNED THE PROFIT/GAIN BUT THESE ARE REGULAR AND SY STEMATIC TRANSACTIONS OF PURCHASE AND SALE WITHOUT HAVING ANY INTENTION TO RETAIN THESE LANDS OR TO CARRY OUT ANY AGRICULTURAL OPERATIONS ON THE SA ME. FURTHER THE ASSESSEE HAS ALSO TAKEN A PLEA THAT THE ASSESSEE HA S NOT TREATED THESE LANDS AS STOCK IN TRADE IN THE BOOKS, HOWEVER, IT IS ALSO NOT A DISPUTED FACT THAT THE ASSESSEE IS NOT MAINTAINING REGULAR BOOKS OF ACCOUNT AND THEREFORE, THE BOOKS OF ACCOUNT CANNOT BE RELIED UP ON IN SUPPORT OF THE CLAIM OF INVESTMENT OR STOCK IN TRADE. THE NATURE OF TRANSACTION HAS TO BE DETERMINED ONLY BY LOOKING INTO THE BARE DETAILS OF THE TRANSACTIONS AND INTENTION OF THE ASSESSEE FOR PURCHASE OF AGRICULTU RAL LAND. THE CONSIDERATION RECEIVED IN THE FORM OF SHARE CAPITAL OF THE COMPANIES OWNED BY THE ASSESSEE WOULD NOT CHANGE THE CHARACTER OF TRANSACTION AS THE LANDS WERE PURCHASED BY THE ASSESSEE FROM THE AG RICULTURISTS THEN ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 17 THOSE LANDS WERE CONVERTED TO NON-AGRICULTURE AT THE TIME OF SALE TO THE COMPANY. THE ASSESSEE HAS CONTENDED THAT CONVERSION CHARGES WERE PAID BY THE COMPANY AND NOT BY THE ASSESSEE, HOWEVER, IT IS NOT RELEVANT ONCE THE ASSESSEE BEING THE DIRECTOR OF THOSE COMPANIES THEN THE PAYMENT OF CONVERSION CHARGES SHOWN BY THESE COMPANIES ARE ALSO IN FURTHERANCE OF THE PURPOSE TO BE ACHIEVED BY INFLATING THE COST OF ACQUISITION IN THE HANDS OF THE COMPANY AND MAXIMUM GAIN IN THE HAND O F THE ASSESSEE SO AS TO AVOID THE TAX LIABILITY ON THE ENTIRE SERIES OF TRANSACTIONS BY THE ASSESSEE AS WELL AS BY THE COMPANIES. 7.1 IN ORDER TO DETERMINE THE REAL NATURE OF TRANSA CTION WHETHER IT IS ADVENTUROUS BEING BUSINESS TRANSACTIONS OR INVESTME NT, VARIOUS FACTORS ARE TO BE TAKEN INTO CONSIDERATION. THE INTENTION O F THE ASSESSEE AT THE TIME OF PURCHASE, TREATMENT OF THE LAND IN QUESTION , HOLDING PERIOD, ACTUAL USE OF LAND, LOCATION OF LAND, SURROUNDING CIRCUMST ANCES AND NEAR FUTURE USE OF LAND ETC. ARE THE RELEVANT CRITERIA FOR THE PURPOSE OF DETERMINING THE NATURE OF TRANSACTION. IN THE CASE IN HAND, THE RE IS NO DISPUTE THAT THE ASSESSEE HAS PURCHASED THE LANDS IN QUESTION WITH TH E INTENTION TO SELL WITHOUT HOLDING IT FOR A CONSIDERABLE PERIOD OF TIME . THE ACTUAL USE OF LAND AND THE INTENDED FUTURE USE OF LAND IS ALSO NOT IN DISPUTE AS IT WAS NOT FOR AGRICULTURE PURPOSE AS SUBSEQUENTLY THE LANDS WERE C ONVERTED FOR NON- AGRICULTURAL USE. THE LOCATION OF THE LAND AND THE A REA SURROUNDING THE ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 18 LAND ARE ALSO IN THE PROCESS OF DEVELOPMENT OF REAL ESTATE FOR NON- AGRICULTURAL PURPOSE AND THEREFORE, THE ENTIRE EXER CISE OF PURCHASE AND SALE OF AGRICULTURAL LANDS IN QUESTIONS WERE TO USE THE SAME FOR DEVELOPMENT OF REAL ESTATE. HENCE, THE LANDS HAVE N O MORE RETAINED THE CHARACTER OF AGRICULTURAL LAND. WHEN THE ENTIRE SUR ROUNDING AREA WAS UNDER REAL ESTATE DEVELOPMENT AND ALREADY DEVELOPED AREA THEN THE TRANSACTION OF PURCHASE AND SALE OF SAID AGRICULTUR AL LAND NOT A ISOLATED SINGLE TRANSACTION BUT A SYSTEMATIC REPEATED TRANSA CTIONS ARE WITH THE MOTIVE AND VIEW TO EARN PROFIT ON RESALE. THE PUNE BE NCHES OF THE TRIBUNAL IN THE CASE OF DILIP BATTU KARANJULE VS ITO (SUPRA) HAS CONSIDERED AN IDENTICAL ISSUE IN PARA 7.8 TO 10 AS UNDER: 7.8 PERTINENT TO NOTE HERE THAT THE HON'BLE SUPREME C OURT IN THE CASE OF DALMIA CEMENT LTD. V. CIT [1976] 105 ITR 633 HELD THAT IT IS NOT POSSIBLE TO EVOLVE ANY SINGLE LEGAL TEST OR FORMULA WHICH COULD BE APPLIED IN DETERMINING WHETHER A TRANSACTION IS AN ADVENTUR E IN THE NATURE OF TRADE AND THAT THE ANSWER TO THE QUESTION MUST DEPEND IN EACH CASE ON THE TOTAL IMPRESSION AND EFFECT OF ALL THE RELEVANT FACTORS A ND CIRCUMSTANCES PROVED THEREIN AND WHICH DETERMINE THE CHARACTER OF THE TR ANSACTION. 7.9 THUS, THE CUMULATIVE FACTS AND CIRCUMSTANCES SEEN HOLISTICALLY AND READ IN CONJUNCTION THE TESTS OR PARAMETERS LAID DOWN BY JU DICIAL PRECEDENTS PROVIDES SOUND BASIS TO INFER THE INTENTION OF COMM ERCIAL GAIN IN THE IMPUGNED TRANSACTION. 8. HAVING REGARD TO THE TOTALITY OF FACTS AND CIRCUM STANCES, WE HAVE NO HESITATION TO HOLD THAT THE IMPUGNED LAND WAS PURCH ASED WITH AN INTENTION TO SELL THE SAME TO THE IDENTIFIED BUYERS TO ACHIEV E COMMERCIAL OBJECTIVES OUTRIGHT. AS NOTED EARLIER, SECTION 2(13) OF THE AC T SEEK TO EXPLAIN THE TERM OF 'BUSINESS' BY WAY OF INCLUSIVE DEFINITION. AS PE R SECTION 2(13) EXPRESSION 'BUSINESS' INCLUDE NOT ONLY TRADE OR COM MERCE, ETC. BUT DEFINITION FURTHER EXTENDS TO ENCOMPASS WITHIN ITS AMBIT AN 'ADVENTURE IN THE NATURE OF TRADE'. THE ENTIRE GAMUT OF ACTION OF THE ASSESSEE IN ENGAGING IN SUCH BIG TICKET LAND PURCHASE WITHOUT EMPLOYING ANY FUND OF HIS OWN AND ALMOST IMMEDIATE RE-SALE THEREOF CLEARLY DEMONS TRATES THE IMPLICIT ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 19 INTENTION OF THE ASSESSEE THAT THE TRANSACTION ENTE RED WAS NOTHING BUT AN 'ADVENTURE IN THE NATURE OF TRADE' I.E. A BUSINESS TRANSACTION UNDER EXTENDED DEFINITION OF S. 2(13) OF THE ACT. CONSEQUENTLY, PR OFITS ARISING THEREFROM ACQUIRES THE CHARACTER OF 'BUSINESS INCOME' CHARGEA BLE UNDER S. 28 OF THE ACT. 9. SEVERAL JUDICIAL PRECEDENTS WERE QUOTED ON BEHALF OF THE ASSESSEE TO SUPPORT HIS CASE. AS ALREADY NOTED, THE ISSUE IS ES SENTIALLY FACTUAL AND THUS INFERENCE WOULD VARY FROM CASE TO CASE DEPENDING ON ITS OWN FACTS. THE DECISION OF CO-ORDINATE BENCH OF TRIBUNAL IN ANIL R. BIHANI V. ITO [IT APPEAL NO. 2502 (PN) OF 2012, DATED 11-4-2016] RELI ED UPON BY ASSESSEE WAS RENDERED IN ITS OWN SET OF FACTS AND IS CLEARLY DISTINGUISHABLE. THERE IS NO REFERENCE TO ANY BORROWED FUNDS FOR ACQUISITION OF ASSET IN THAT CASE. THE PURCHASE WAS THUS OUT OF ITS OWN RESOURCES WHIC H FACT SERVES AS ONE OF THE CRUCIAL INDICATORS OF THE INTENTION READ IN CON JUNCTION WITH OTHER FACTS IN THE PRESENT CASE. SIMILARLY, DECISIONS IN THE CA SE OF MARIGOLD MERCHANISE (P.) LTD. V. DY. CIT [2015] 55 TAXMANN.COM 358 (DELHI - TRIB.) ; SURENDRA KESHAVLAL SHAH V. DY. CIT [IT APPEAL NO. 1308 (PN) OF 2011, DATED 24-7-2015] & ACIT V. ALPANA SURENDRA SANCHETI [IT APPEAL NO. 1081 (PN) OF 2011 ORDER DATED 22/03/2013] REFER RED TO AND RELIED UPON AT THE TIME OF HEARING WERE PERUSED AND FOUND TO BE MATERIALLY DIFFERENT IN FACTS QUA THE FACTS OF THIS CASE IN TERMS OF BORROWALS, CAPAC ITY TO HOLD THE PROPERTY ACQUIRED, TIME HORIZON OF HOLD ING, EXPLOITATION FOR CULTIVATION OF CROP ETC. WHERE EACH OF THESE FACTS MAY HAVE MATERIAL BEARING IN THE DETERMINATION OF INTENTION AT THE TI ME OF ACQUISITION OF A PROPERTY. THUS, WE ARE UNABLE TO RECONCILE THE FACT S OF THE PRESENT APPEAL WITH THE PRECEDENTS QUOTED AT THE BAR. SUFFICE IT T O SAY THAT IN NONE OF THESE JUDGMENTS CITED, THE ACTION OF PURCHASE OF LAND WER E FOUND TO BE IN CONCERT WITH THE ULTIMATE AND IDENTIFIED BUYERS AND OWNERSH IP WERE TRANSFERRED IN SUCH A SHORT SPAN OF TIME WITHOUT PUTTING THE PURPO RTED AGRICULTURAL LAND FOR ITS USE AT ANY POINT OF TIME. IT IS SETTLED POS ITION IN LAW THAT THE DECISION OF THE COURT HAS TO BE READ IN THE CONTEXT OF THE F ACTS INVOLVED THEREIN AND NOT ON THE BASIS OF WHAT LOGICALLY FLOWS THEREFROM AS HELD BY THE SUPREME COURT IN AMBICA QUARRY WORKS V. STATE OF GUJARAT [1987] 1 SCC 213. IN THIS VIEW OF THE MATTER, WE CONCUR WITH THE VIEW OF THE ASSESSING OFFICER AND THE CIT (A) IN BRINGING THE INCOME ARISING ON S ALE OF LAND UNDER THE HEAD 'BUSINESS INCOME'. 10. IN VIEW OF THE AFORESAID DISCUSSION, WE DO NOT CO NSIDER IT NECESSARY TO GO INTO THE OTHER ASPECTS OF CONTROVERSY AS TO WHETHER THE IMPUGNED LAND WAS AGRICULTURAL LAND OR OTHERWISE AS THESE ASPECTS ARE RELEVANT ONLY FOR THE PURPOSE OF TAXABILITY UNDER THE HEAD 'CAPITAL GAIN' IN THE LIGHT OF SECTION 2(14) OF THE ACT. EVEN OTHERWISE THE DECISIONS RELIED UPON BY THE LD AR OF THE ASSESSEE CANNOT BE STRAIGHTWAY APPLIED BUT THE QUESTION OF N ATURE OF TRANSACTION ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 20 HAS TO BE DECIDED DEPENDING UPON THE RELEVANT FACTS AND CIRCUMSTANCES OF EACH CASE. THUS THERE CANNOT BE A SINGLE CRITERI A WHICH CAN BE APPLIED TO EACH AND EVERY CASE FOR DETERMINING THE QUESTION OF NATURE OF TRANSACTION WHETHER IT IS ADVENTUROUS IN NATURE OR MERELY AN INVESTMENT. THIS IS A MIXED QUESTION OF LAW AND FACTS AND THE PRI NCIPLE OF LAW CAN BE APPLIED DEPENDING UPON THE FACTS OF EACH CASE. IN T HE CASE IN HAND WHEN THE FACTS CLEARLY REVEALED THE INTENTION AND PATRON OF THE TRANSACTION WHICH IS NOTHING BUT ADVENTUROUS IN NATURE THEN THE LARGE NUMBER OF TRANSACTIONS WERE ENTERED INTO WITHIN A SHORT PERIOD OF TIME SHOWS THAT IT WAS AN ORGANIZED BUSINESS ACTIVITY AND THERE WAS NO I NTENTION OF THE ASSESSEE TO HOLD THESE LANDS AS AN INVESTMENT. IT A PPEARS THAT IT WAS PREDETERMINED BETWEEN THE PARTIES AS THE ASSESSEE H AS TO PLAY THE ROLE OF AN INTERMEDIARY IN THESE TRANSACTIONS OF PURCHASE A ND SUBSEQUENTLY TRANSFERRED TO THE COMPANIES AND IN THIS PROCESS, T HE ASSESSEE HAS EARNED A HUGE PROFIT, WHICH IS NOT POSSIBLE IN THE NORMAL T RANSACTION OF INVESTMENT IN SUCH A SHORT SPAN OF TIME. THEREFORE, IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE C ONSIDERED VIEW THAT THE TRANSACTIONS ARE CARRIED OUT WITH A CLEAR INTENT ION TO EARN THE PROFIT IN A SHORT PERIOD OF TIME WITH A PREPLANNED ORGANIZED M ANNER AND ACTIVITY, WHICH IS NOTHING BUT NATURE OF BUSINESS. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF HEMACHAND HIRACHAND SHAH VS CIT(SUPR A) WHILE ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 21 CONSIDERING THE ISSUE OF PURCHASE AND SALE OF LAND IS A BUSINESS OR AN ADVENTURE IN NATURE OF TRADE OR INVESTMENT AS HELD IN PARA 4TO 8 AS UNDER: 4. ON THE FACTS OF THE CASE AND FROM THE MATERIAL ON R ECORD WE FIND THAT THE EXPLANATIONS OFFERED BY THE ASSESSEE FOR DISPOSING OF THE LANDS SOON AFTER HIS PURCHASE ARE JUST NOT ACCEPTABLE. THE EXPLANATION O F THE ASSESSEE IN MOST OF THE CASES IS THAT THE LANDS WERE 'DABHADA' LANDS, ON WH ICH CONSIDERABLE EXPENDITURE WOULD HAVE TO BE INCURRED IN ORDER TO D EVELOP THEM AND MAKE THEM FIT FOR AGRICULTURAL OPERATIONS. IT SHOULD BE NOTED THAT THE ASSESSEE WHO PROFESSES TO BE AN AGRICULTURIST WOULD BE AWARE OF THE NATURE AND CHARACTER OF THE LAND HE IS PURCHASING PARTICULARLY WHEN HE PROF ESSES TO PURCHASE THE SAID LANDS FOR THE PURPOSE OF AGRICULTURE. WE CANNOT ACC EPT A SITUATION WHERE SUCH AGRICULTURIST WOULD PURCHASE A LAND FOR THE PURPOSE OF AGRICULTURE, ON AN ASSUMPTION OR AN OBSERVATION THAT IT WOULD BE FIT F OR AGRICULTURE, AND IMMEDIATELY AFTER THE PURCHASE, ARRIVE AT A CONCLUS ION THAT IT WOULD BE UNECONOMICAL TO DEVELOP THE SAME FOR AGRICULTURE AN D WOULD, THEREFORE, BE REQUIRED TO DISPOSE OF THE SAME. WE FIND THE ASSESS EE TO HAVE ENTERED INTO A SERIES OF TRANSACTIONS OF PURCHASE AND SALE, AND IN EACH CASE, THE SALE WAS WITHIN A REASONABLY SHORT TIME OF THE PURCHASE. THU S, THE VERY FACT THAT LARGE NUMBER OF SUCH TRANSACTIONS WAS ENTERED INTO WITHIN A REASONABLY SHORT PERIOD OF TIME ENABLES US TO REACH A CONCLUSION THAT IT WA S AN ORGANISED BUSINESS ACTIVITY ON THE PART OF THE ASSESSEE. 5. THE CONTENTION RAISED ON BEHALF OF THE ASSESSEE BEF ORE THE TRIBUNAL TO THE EFFECT THAT HIS EXPLANATION OUGHT TO HAVE BEEN ACCEPTED AS AFORESAID, IS UNREASONABLE AND HAS RIGHTLY BEEN REJECTED BY THE TRIBUNAL. 6. ON A TOTALITY OF THE ASSESSMENT OF THE FACTS AND CI RCUMSTANCES OF THE CASE AND ON THE MATERIAL ON RECORD WE FIND THAT THE CONCLUSI ON ARRIVED AT BY THE TRIBUNAL IS CORRECT. IN THIS CONTEXT WE ALSO FIND THAT THE A SSESSEE WAS, AT LEAST SO FAR AS THE TRANSACTIONS IN QUESTION ARE CONCERNED, CARRYIN G ON BUSINESS OR AN ADVENTURE IN THE NATURE OF TRADE, AND THAT, THEREFO RE, THE PROFIT WHICH ACCRUED FROM SUCH TRANSACTIONS WOULD BE TAXABLE AS BUSINESS INCOME. 7. IN VIEW OF OUR OBSERVATIONS MADE HEREINABOVE WE DO NOT PROPOSE TO ENTER INTO A DETAILED DISCUSSION AS TO THE TREATMENT GIVEN BY TH E TRIBUNAL ON THE MATERIAL ON RECORD AND THE APPRECIATION OF SUCH EVIDENCE. SUFFI CE IT TO SAY THAT THE CONCLUSIONS DRAWN BY THE TRIBUNAL ON THE BASIS OF S UCH MATERIAL IS EMINENTLY REASONABLE AND SUSTAINABLE AND IT CANNOT BE SAID TH AT THE TRIBUNAL ERRED IN LAW IN ARRIVING AT SUCH CONCLUSION. 8. IN THE AFORESAID PREMISES, THE QUESTION BEFORE US W OULD BE REQUIRED TO BE ANSWERED IN THE AFFIRMATIVE. ACCORDINGLY, WE HOLD T HAT THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT THE ASSESSEE WAS CARRYING ON A BUSINESS OR AN ADVENTURE IN THE NATURE OF TRADE WHEN HE PURCHASED AND SOLD CERT AIN AGRICULTURAL LANDS. ACCORDINGLY, IN VIEW OF THE ABOVE DISCUSSION AND FOL LOWING THE DECISIONS OF HONBLE GUJARAT HIGH COURT (SUPRA) WE SET ASIDE THE IMPUGNED ORDER OF ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 22 THE LD. CIT(A) QUA THIS ISSUE AND RESTORE THE FINDIN G OF THE ASSESSING OFFICER. 7.2 ON THE ALTERNATIVE PLEA THAT EVEN IF THE ACTIVI TY OF THE ASSESSEE CONSIDERED AS BUSINESS, THE INCOME DERIVED FROM SAL E OF THE AGRICULTURAL LAND IS AN AGRICULTURAL INCOME, WE FIND THAT BEFORE GOING INTO THE SAID ISSUE WHETHER THE SALE OF AGRICULTURAL LAND RESULTS IN AGRICULTURAL INCOME OR CAPITAL GAIN NOT LIABLE TO TAX U/S 2(14)(III) OF TH E ACT, THE EXPRESSION AGRICULTURAL LAND ITSELF HAS TO BE TAKEN INTO CONSI DERATION. THE QUESTION WHETHER A PARTICULAR LAND IS AGRICULTURAL LAND WAS FI RST CONSIDERED BY THE CONSTITUTIONAL BENCH OF THE HON'BLE SUPREME COURT I N THE CASE OF COMMISSIONER OF WEALTH TAX VS. OFFICER IN CHARGE (CO URT OF WARDS) 105 ITR 133. THE DEFINITION OF AGRICULTURAL LAND WITHIN THE MEANING OF SECTION 2(E) OF WEALTH TAX ACT WAS CONSIDERED AND IT WAS OBSER VED BY THE HON'BLE SUPREME COURT THAT TO DETERMINE THE CHARACT ER OF LAND ACCORDING TO THE PURPOSE FOR WHICH IT IS MEANT OR SET APART AN D CAN BE USED, IS A MATTER WHICH OUGHT TO BE DETERMINED ON THE FACTS OF EACH PARTICULAR CASE. WHAT IS REALLY REQUIRED TO BE SHOWN IS THE CONNECTIO N WITH AN AGRICULTURAL PURPOSE AND USER AND NOT THE MERE POSSIBILITY OF US ER OF LAND, BY SOME POSSIBLE FUTURE OWNER OR POSSESSOR, FOR AN AGRICULTU RAL PURPOSE. IT IS NOT THE MERE POTENTIALITY, WHICH WILL ONLY AFFECT ITS VAL UATION AS PART OF 'ASSETS', BUT ITS ACTUAL CONDITION AND INTENDED USE R WHICH HAS TO BE SEEN ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 23 FOR PURPOSES OF EXEMPTION FROM WEALTH-TAX. THE HON'BL E SUPREME COURT IN A SUBSEQUENT DECISION IN THE CASE OF SMT. SARIFABIB I MOHMED IBRAHIM V. COMMISSIONER OF INCOME-TAX 204 ITR 631 HAS REFERRED TO THE DECISION OF THE CONSTITUTION BENCH IN THE CASE OF COMMISSIONER OF WEALTH TAX VS. OFFICER IN CHARGE (COURT OF WARDS) (SUPRA) AT PAGE 637 AND 638 AS UNDER: WHETHER A LAND IS AN AGRICULTURAL LAND OR NOT IS E SSENTIALLY A QUESTION OF FACT. SEVERAL TESTS HAVE BEEN EVOLVED IN THE DECISIONS OF THIS COURT AND THE HIGH COURTS, BUT ALL OF THEM ARE MORE IN THE NATURE OF G UIDELINES. THE QUESTION HAS TO BE ANSWERED IN EACH CASE HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THAT CASE. THERE MAY BE FACTORS BOTH FOR AND AGAINST A P ARTICULAR POINT OF VIEW. THE COURT HAS TO ANSWER THE QUESTION ON A CONSIDERATION OF ALL OF THEMA PROCESS OF EVALUATION. THE INFERENCE HAS TO BE DRAWN ON A CUMU LATIVE CONSIDERATION OF ALL THE RELEVANT FACTS. THE FIRST DECISION OF THIS COURT WHICH CONSIDERED T HE MEANING OF THE EXPRESSION 'AGRICULTURAL LAND' IS IN CIT V . RAJA BENOY KUMAR SAHAS ROY [1957] 32 ITR 466 . BUT THE QUESTION THERE WAS WHETHER THE INCOME FROM FOREST LAND DERIVED FROM SAL AND PIYASAL TREES, 'NOT GROWN BY HUMAN SKILL AND LA BOUR' CONSTITUTES AGRICULTURAL INCOME? THE DECISION THAT DIRECTLY CONSIDERED THE I SSUE, THOUGH UNDER THE WEALTH-TAX ACT, 1957 IS IN CWT V. OFFICER-IN-CHARGE ( COURT OF WARDS ) [1976] 105 ITR 133 (SC) (HEREINAFTER REFERRED TO AS THE BEGUMPET PALACE CASE). IT WAS AN APPEAL FROM A FULL BENCH DECISION OF THE ANDHRA PRADESH HIGH COURT. THE HIGH COURT HAD TAKEN THE VIEW, FOLLOWING A DECISION OF THE MADRAS HIGH COURT IN T. SAROJINI DEVI V. T. SRI KRISHNA AIR 1944 MAD. 401, THAT THE EXPRESSION 'AGRICULTURAL LAND' SHOULD BE GIVEN THE WIDEST MEAN ING. IT HELD THAT THE FACT THAT THE LAND IS ASSESSED TO LAND REVENUE AS AGRICULTURA L LAND UNDER THE STATE REVENUE LAW IS A STRONG PIECE OF EVIDENCE OF ITS CHARACTER AS AN AGRICULTURAL LAND. ON APPEAL, A CONSTITUTION BENCH OF THIS COURT HELD THA T; ( A ) INASMUCH AS AGRICULTURAL LAND IS EXEMPTED FROM THE PURVIEW OF THE DEFINITION OF THE EXPRESSION 'ASSETS', IT IS 'IMPOSSIBLE TO ADOPT SO WIDE A TEST AS WOULD OBV IOUSLY DEFEAT THE PURPOSE OF THE EXEMPTION GIVEN'. THE IDEA BEHIND EXEMPTING THE AGRICULTURAL LAND IS TO ENCOURAGE CULTIVATION OF LAND AND THE AGRICULTURAL OPERATIONS. 'IN OTHER WORDS THIS EXEMPTION HAD TO BE NECESSARILY GIVEN A MORE RESTRI CTED MEANING THAN THE VERY WIDE AMBIT GIVEN TO IT BY THE FULL BENCH OF THE AND HRA PRADESH HIGH COURT', ( B ) WHAT IS REALLY REQUIRED TO BE SHOWN IS THE CONNECTI ON WITH AN AGRICULTURAL PURPOSE AND USER AND NOT THE MERE POSSIBILITY OF USER OF LAND BY SOME POSSIBLE FUTURE OWNER OR POSSESSOR, FOR AN AGRICULTURAL PURP OSE. IT IS NOT THE MERE POTENTIALITY BUT ITS ACTUAL CONDITION AND INTENDED USER WHICH HAS TO BE SEEN FOR PURPOSES OF EXEMPTION, (EMPHASIS SUPPLIED) ( C ) 'THE PERSON CLAIMING AN EXEMPTION OF ANY PROPERTY OF HIS FROM THE SCOPE OF HIS ASSETS MUST SATISFY THE CONDITIONS OF THE EXEMPTION', ( D ) 'THE DETERMINATION OF THE CHARACTER OF LAND, ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 24 ACCORDING TO THE PURPOSE FOR WHICH IT IS MEANT OR S ET APART AND CAN BE USED, IS A MATTER WHICH OUGHT TO BE DETERMINED ON THE FACTS OF EACH PARTICULAR CASE', ( E ) THE FACT THAT THE LAND IS ASSESSED TO THE LAND REVE NUE AS AGRICULTURAL LAND UNDER THE STATE REVENUE LAW IS CERTAINLY A RELEVANT FACT BUT IT IS NOT CONCLUSIVE. WHETHER A LAND IS AN AGRICULTURAL LAND OR NOR IS ES SENTIALLY A QUESTION OF FACT AND SEVERAL TESTS HAS TO BE APPLIED AS LAID DO WN BY THE HON'BLE SUPREME COURT AND HON'BLE HIGH COURTS THOUGH ALL OF THEM ARE MERE IN THE NATURE OF GUIDANCE. THE QUESTION HAS TO BE ANSWER ED IN EACH CASE HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. AS IT IS CLEAR THAT THE HON'BLE SUPREME COURT HAS HELD THAT THE LA ND IS ASSESSED TO LAND REVENUE AS AN AGRICULTURAL LAND IS NOT A CONCLUSIVE FACT AND THE QUESTION IS TO BE DECIDED BY CONSIDERING VARIOUS FACTORS INCLUD ING WHETHER THE LAND IS USED FOR CULTIVATION AND AGRICULTURE OPERATIONS ARE CARRIED OUT. THUS WHAT IS REALLY REQUIRED TO BE SEEN IN CONNECTION WITH AN AGRICULTURAL LAND IS THE CONNECTION WITH AGRICULTURAL PURPOSE AND USER AND NO T THE MERE POSSIBLE OF USER OF LAND BY SOME POSSIBLE FUTURE OWNER. THE H ON'BLE SUPREME COURT IN THE CASE OF SMT. SARIFABIBI MOHMED IBRAHIM V. COMMISSIONER OF INCOME-TAX (SUPRA) HAS ALSO CONSIDERED THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. V.A. TRIVEDI 172 ITR 95 AND OBSERVED AT PAGE 641 AS UNDER: THE BENCH OBSERVED THAT TO ASCERTAIN THE TRUE CHA RACTER AND THE NATURE OF THE LAND, IT MUST BE SEEN WHETHER IT HAS BEEN PUT TO US E FOR AGRICULTURAL PURPOSES FOR A REASONABLE SPAN OF TIME PRIOR TO THE RELEVANT DAT E AND FURTHER WHETHER ON THE RELEVANT DATE THE LAND WAS INTENDED TO BE PUT TO US E FOR AGRICULTURAL PURPOSES ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 25 FOR A REASONABLE SPAN OF TIME IN THE FUTURE. EXAMIN ING THE FACTS OF THE CASE FROM THE SAID POINT OF VIEW, THE BENCH HELD THAT THE AGR EEMENT ENTERED INTO BY THE ASSESSEE WITH THE HOUSING SOCIETY IS THE CRUCIAL CI RCUMSTANCE SINCE IT SHOWED THAT THE ASSESSEE AGREED TO SELL THE LAND TO HOUSIN G SOCIETY ADMITTEDLY FOR UTILISATION FOR NON-AGRICULTURAL PURPOSES. THE SALE -DEEDS WERE EXECUTED FOUR MONTHS AFTER THE AGREEMENT OF SALE AND EVEN IF ANY AGRICULTURAL OPERATIONS WERE CARRIED ON WITHIN THE SAID SPAN OF FOUR MONTHS, - T HE BENCH HELD - IT WAS EVIDENTLY IN THE NATURE OF A STOP-GAP ARRANGEMENT. ON THE DATE THE LAND WAS SOLD, THE BENCH HELD, THE LAND WAS NO LONGER AGRICU LTURAL LAND WHICH IS EVIDENT FROM THE FACT THAT THE ASSESSEE HAD OBTAINED PERMIS SION EVEN IN AUGUST 1966 TO CONVERT THE SAID LAND TO NON-AGRICULTURAL PURPOSES. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. V.A. TRIVEDI (SUPRA) HAS LAID DOWN THE PRINCIPLE FOR ASCERTAINING THE TRUE CHARACTER AND NATURE OF THE LAND THAT IT MUST BE SEEN WHETHER IT HAS BEEN PUT TO USE FOR AGRICULTURAL PURPOSES FOR A REASONABLE SPAN OF TIME PRIOR TO RELEVANT DATE AND FURTHER THE LAND WAS INTENDED TO BE PUT TO USE F OR AGRICULTURAL PURPOSE FOR A REASONABLE TIME PERIOD IN FUTURE. IF THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT AS WELL AS THE HON'BLE HIGH COURT ARE TO BE APPLIED IN THE FACTS OF THE PRESENT CASE THEN ONE C AN SAFELY SAY THAT THE LAND PURCHASED BY THE ASSESSEE, WHO IS NOT AN AGRICU LTURIST FOR THE INTENTION TO RESALE IT TO THE COMPANY AS PER THEIR PREDETERMINED PLAN LOSES ITS CHARACTER THE MOMENT THE ASSESSEE PURCHASED THE LANDS WITH THE INTENTION TO BE USED IN FUTURE FOR NON-AGRICULTURAL PURPOSES. HENCE, THE LAND WAS NO LONGER AGRICULTURAL LAND WHEN THE ASSESSE E PURCHASED IT FOR RESALE AND WAS CONVERTED TO NON-AGRICULTURAL USE AT THE TIME OF SALE TO THE COMPANY. THE HON'BLE SUPREME COURT AFTER CONSIDERING THE VARIOUS ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 26 DECISIONS ON THE POINT AS WELL AS THE FACTS AS HELD AT PAGE 642 AND 643 AS UNDER: NOW, WE MAY CONSIDER THE VARIOUS CIRCUMSTANCES AP PEARING FOR AND AGAINST THE APPELLANT'S CASE. THE FACTS IN THEIR FAVOUR ARE: LA ND BEING REGISTERED AS AGRICULTURAL LAND IN THE REVENUE RECORDS; PAYMENT O F LAND REVENUE IN RESPECT THEREOF TILL THE YEAR 1968-69; ABSENCE OF ANY EVIDE NCE THAT IT WAS PUT TO ANY NON- AGRICULTURAL USE BY THE APPELLANTS; THAT THE LAND W AS ACTUALLY CULTIVATED TILL AND INCLUDING THE AGRICULTURAL YEAR 1964-65; THAT THERE WERE AGRICULTURAL LANDS ABUTTING THE SAID LAND AND THAT THE APPELLANTS HAD NO OTHER SOURCE OF INCOME EXCEPT THE INCOME FROM THE SAID LAND. AS AGAINST TH E ABOVE FACTS, THE FACTS APPEARING AGAINST THEIR CASE ARE: THE LAND WAS SITU ATED WITHIN THE MUNICIPAL LIMITS - IT WAS SITUATED AT A DISTANCE OF ONE KILOMETER FR OM THE SURAT RAILWAY STATION; THE LAND WAS NOT BEING CULTIVATED FROM THE YEAR 1965-66 UNTIL IT WAS SOLD IN 1969; THE APPELLANTS HAD ENTERED INTO AN AGREEMENT SALE WITH A HOUSING CO-OPERATIVE SOCIETY TO SELL THE SAID LAND FOR AN AVOWED NON-AGR ICULTURAL PURPOSE, NAMELY, CONSTRUCTION OF HOUSES; THEY HAD APPLIED IN JUNE 19 68 AND MARCH 1969 FOR PERMISSION TO SELL THE SAID LAND FOR NON-AGRICULTUR AL PURPOSES UNDER SECTION 63 OF THE BOMBAY TENANCY AND AGRICULTURAL LANDS ACT AND O BTAINED THE SAME ON 22-4- 1969; SOON AFTER OBTAINING THE SAID PERMISSION THEY EXECUTED SALE-DEEDS IN THE FOLLOWING MONTH, I.E., IN MAY 1969; THE LAND WAS SOLD AT THE RATE OF RS. 2 3 PER SQ. YD. AND THE PURCHASER-SOCIETY COMMENCED CONSTRUCTIO N OPERATIONS WITHIN THREE DAYS OF PURCHASE. WHAT IS THE INFERENCE THAT FLOWS FROM A CUMULATIVE CONSIDERATION OF ALL THE AFORESAID CONTENDING FACTS ? THIS QUESTION HAS TO BE ANSWERED KEEPING THE CRITERIA EVOLVED IN BEGUMPET PALACE'S CASE ( SUPRA ) SET OUT HEREINBEFORE. IN OUR OPINION, THE ENTERING INTO THE AGREEMENT TO SELL THE LAND FOR HOUSING PURPOSES, THE APPLYING AND OBTAINING THE PE RMISSION TO SELL THE LAND FOR NON-AGRICULTURAL PURPOSES UNDER SECTION 63 AND ITS SALE SOON THEREAFTER AND THE FACT THAT THE LAND WAS NOT CULTIVATED FOR A PERIOD OF FOUR YEARS PRIOR TO ITS SALE COUPLED WITH ITS LOCATION, THE PRICE AT WHICH IT WA S SOLD DO OUTWEIGH THE CIRCUMSTANCES APPEARING IN FAVOUR OF THE APPELLANTS ' CASE. THE AFORESAID FACTS DO ESTABLISH THAT THE LAND WAS NOT AN AGRICULTURAL LAN D WHEN IT WAS SOLD. THE APPELLANTS HAD NO INTENTION TO BRING IT UNDER CULTI VATION AT ANY TIME AFTER 1965-66 CERTAINLY NOT AFTER THEY ENTERED INTO THE AGREEMENT TO SELL THE SAME TO A HOUSING CO-OPERATIVE SOCIETY. THOUGH A FORMAL PERMISSION UN DER SECTION 65 OF THE BOMBAY LAND REVENUE CODE WAS NOT OBTAINED BY THE AP PELLANTS, YET THEIR INTENTION IS CLEAR FROM THE FACT OF THEIR APPLICATI ON FOR PERMISSION TO SELL IT FOR A NON-AGRICULTURAL PURPOSE UNDER SECTION 63 OF THE BO MBAY TENANCY AGRICULTURAL LANDS ACT. WE ARE, THEREFORE, OF THE OPINION THAT THE HIGH COU RT WAS RIGHT IN HOLDING THAT THE SAID LAND WAS NOT AN AGRICULTURAL LAND AT THE TIME OF ITS SALE AND THAT THE INCOME ARISING FROM ITS SALE WAS NOT EXEMPT FROM THE CAPIT AL GAINS TAX. THE APPEALS, ACCORDINGLY, FAIL AND ARE DISMISSED. NO COSTS. ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 27 IT WAS CONSIDERED BY THE HON'BLE SUPREME COURT THAT THE ASSESSEE ENTERED INTO AN AGREEMENT TO SELL THE LAND FOR HOUS ING PURPOSE AFTER APPLYING AND OBTAINING THE PERMISSION TO SELL THE L AND FOR NON-AGRICULTURAL PURPOSE AND THEREFORE, WHEN THE LAND WAS NEITHER CUL TIVATED PRIOR TO THE SALE NOR TO BE CULTIVATED IN FUTURE COUPLED WITH THE FACTORS OF ITS LOCATIONS AND PRICES ESTABLISHED THAT THE LAND WAS NOT AN AGRI CULTURAL LAND WHEN IT WAS SOLD. THIS ISSUE WAS AGAIN CONSIDERED BY THE HONB LE BOMBAY HIGH COURT IN THE CASE OF GOPAL C SHARMA VS CIT 209 ITR 94 6 AND BY FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F SMT. SARIFABIBI MOHMED IBRAHIM V. COMMISSIONER OF INCOME-TAX (SUPRA), THE HON'BLE HIGH COURT HAS OBSERVED AND HELD IN PARA 13, 24 TO 26 AS UNDER: 13. THE EXPRESSION 'AGRICULTURAL LAND' IS NOT DEFINED UNDER THE ACT. THE QUESTION AS TO WHETHER THE LAND IN QUESTION WAS LIA BLE TO BE CONSIDERED AS AGRICULTURAL LAND FOR PURPOSE OF INCOME-TAX IS L IABLE TO BE DECIDED WITH REFERENCE TO THE CRITERIA LAID DOWN BY JUDICIAL DEC ISIONS OF THE SUPREME COURT AND HIGH COURTS. THE UNDERLYING OBJECT OF THE ACT TO EXEMPT 'AGRICULTURAL INCOME' FROM INCOME-TAX IS TO ENCOURA GE ACTUAL CULTIVATION OR DE FACTOAGRICULTURAL OPERATIONS. ACTUAL USER OF THE LAND FOR AGRICULTURAL PURPOSE OR ABSENCE THEREOF AT THE RELEVANT TIME IS UNDOUBTEDLY ONE OF THE CRUCIAL TESTS FOR DETERMINATION OF THE ISSUE. I T IS WELL SETTLED THAT THE NATURE AND CHARACTER OF LAND MAY UNDERGO A CHANGE D EPENDING UPON ITS SITUATION, GROWTH OF LOCALITY, ZONE IN WHICH IT IS SITUATE AND ITS POTENTIALITY. ACCORDING TO RECENT DECISIONS OF THE SUPREME COURT, THE FACT THAT THE LAND IS SOLD OR TRANSFERRED TO A NON-AGRIC ULTURIST FOR A NON- AGRICULTURAL PURPOSE OR THAT IT IS LIKELY TO BE USE D FOR NON-AGRICULTURAL PURPOSE SOON AFTER ITS TRANSFER IS ALSO A RELEVANT FACTOR GERMANE TO THE DETERMINATION OF THE ISSUE. MERELY BECAUSE THE LAND WAS USED FOR ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 28 AGRICULTURAL PURPOSE IS REMOTE PAST OR IT CONTINUE TO BE ASSESSED TO LAND REVENUE ON THE FOOTING OF AGRICULTURAL LAND IS NOT DECISIVE. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXX 24. THE LEARNED COUNSEL FOR THE ASSESSEE MAINLY RELIE D UPON THE DIVISION BENCH JUDGMENT OF THIS COURT IN THE CASE OF CWT V. H.V. MUNGALE [19841145ITR 208, RATIO OF JUDGMENT OF THE DIVISION BENCH OF THIS COURT IN THE CASE OF WEALTH-TAX REFERENCE NO. 5 OF 1964 DECIDED ON 4-12-1973 AND THE JUDGMENT OF THIS COURT IN CIT V. P.C. JOSHI AND B.C. JOSHI [1993] 202 ITR 1017 . THE THRUST OF THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE FACT THAT THE LAND WAS LYING VACANT AND NOT USED FOR CULTIVATION FOR SEVERAL YEARS WAS NOT OF ANY LEGAL CONSEQUENCE. THE LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE COURT MUST PRESUME THAT THE VACANT LAND CONTINUED T O BE 'AGRICULTURAL LAND' IN NATURE AND CHARACTER ONCE IT WAS SHOWN THA T THE LAND WAS ASSESSED TO LAND REVENUE AS AN AGRICULTURAL LAND. T HE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE LAST TWO PARAGRAPHS FR OM THE JUDGMENT OF CHANDURKAR, J. AS HIS LORDSHIP THEN WAS FROM H.V. M UNGALE'S CASE (SUPRA) WHEREIN IT WAS OBSERVED THAT UNLESS THE LAND WAS AL LOWED TO BE CONVERTED FOR NON-AGRICULTURAL PURPOSE BY THE ORDER OF COLLECTOR UNDER THE PROVISIONS OF THE LAND REVENUE ACT, THE INITIAL PRESUMPTION TO THE EFFECT THAT THE LAND WAS AGRICULTURAL IN NATURE WOU LD CONTINUE TO OPERATE. TO SOME EXTENT, SOME OF THE OBSERVATIONS A PPEAR TO BE IN CONFLICT WITH THE VIEW NOW TAKEN BY THE SUPREME COU RT IN SMT. SARIFABIBI MOHMED IBRAHIM'S CASE (SUPRA). IT IS FAR TOO OBVIOU S TO US THAT THE VIEW TAKEN BY THE SUPREME COURT INSARIFABIBI MOHMED IBRA HIM'S CASE (SUPRA) WOULD PREVAIL. IN OUR OPINION, THE PRINCIPL ES LAID DOWN BY THE SUPREME COURT IN THE CASE OF SMT. SARIFABIBI MOHMED IBRAHIM (SUPRA) AND BY THIS COURT IN V.A. TRIVEDI'S CASE (SUPRA) DO EMPHASISE THE FACTOR OF NON-USER OF THE LAND FOR CU LTIVATION FOR REASONABLE SPAN OF TIME PRIOR TO THE DATE OF TRANSF ER AS A CRUCIAL FACTOR FOR DETERMINATION OF THE ISSUE. APPLYING THE RATIO OF THE SUPREME COURT JUDGMENT IN SMT. SARIFABIBI MOHMED IBRAHIM'S CASE ( SUPRA) TO THE FACTS OF THE CASE, WE HOLD THAT THE REFERENCE LANDS COULD NOT BE CONSIDERED AS 'AGRICULTURAL LANDS' ON THE DATE OF TRANSFER. 25. THE AAC AND THE TRIBUNAL WERE MORE THAN JUSTIFIED IN HIGHLIGHTING THE FACT THAT THE REFERENCE LANDS WERE SITUATE IN HEAVY INDUSTRIAL ZONE AND THAT THE SAID LANDS WERE NOT IN FACT USED OR INTEND ED TO BE USED FOR AGRICULTURAL PURPOSE AT THE RELEVANT TIME SINCE SEV ERAL YEARS. THE AAC ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 29 ALSO RECORDED FINDING OF FACT BASED ON RELEVANT EVI DENCE THAT AT LEAST 10 ACRES OF THE LAND OUT OF 25 ACRES WAS IN FACT USED FOR NON-AGRICULTURAL PURPOSES BY LARSEN & TOUBRO LTD. SINCE THE YEAR 196 0, I.E., FOR 7 YEARS PRIOR TO THE DATE OF TRANSFER OF THE LAND. IF THE R ELEVANT TESTS LAID DOWN BY THE SUPREME COURT IN SMT SARIFABIBI MOHMED IBRAHIM' S CASE (SUPRA) AND THE TEST LAID DOWN BY THIS COURT IN V.A. TRIVEDI'S CASE (SUPRA) ARE TO BE APPLIED TO THIS CASE AS THEY OUGHT TO BE, IT WOULD BECOME OBVIOUS THAT THE FINDING OF FACT ARRIVED AT BY THE ITO, THE AAC AND THE TRIBUNAL CANNOT BE CHARACTERISED AS PERVERSE OR UNSUPPORTED BY EVID ENCE OR ERRONEOUS IN LAW. IT IS NOT POSSIBLE TO ACCEPT THE SUBMISSION MA DE BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE AUTHORITIES BELOW DID NOT APPLY THE CORRECT TEST OR MISDIRECTED THEMSELVES IN LAW OR TH AT THE FINDING OF FACT ARRIVED BY THE TRIBUNAL WAS NOT SUPPORTED BY EVIDEN CE. 26. IN VIEW OF THE ABOVE DISCUSSION WE DO NOT THINK I T NECESSARY TO REFER TO THE OTHER AUTHORITIES CITED AT THE BAR. WE UPHOLD T HE FINDING OF THE TRIBUNAL TO THE EFFECT THAT THE REFERENCE LANDS WER E NOT AGRICULTURAL LANDS. IT IS HELD BY THE HONBLE BOMBAY HIGH COURT THAT TH E FUTURE USE OF LAND WAS NON-AGRICULTURAL PURPOSE AND THEREFORE, THE SAME CANNOT BE CATEGORIZED AS AGRICULTURAL LAND AT THE TIME OF SAL E. THIS FACT OF FUTURE USE OF LAND IS NOT IN DISPUTE IN THE CASE BEFORE US EVE N THE ASSESSEE NOT AN AGRICULTURIST AND HAS NO INTENTION TO CARRY OUT THE AGRICULTURAL OPERATIONS ON THE LANDS IN QUESTION CLEARLY ESTABLISHED THE IN TENDED FUTURE USE FOR NON-AGRICULTURAL PURPOSE. THEREFORE, IN FACTS AND CI RCUMSTANCES OF THE PRESENT CASE AND APPLYING THE TEST AS LAID DOWN BY T HE HON'BLE SUPREME COURT AND THE HON'BLE BOMBAY HIGH COURT WE HAVE NO HESITATION TO HOLD THAT THE LAND IN QUESTIONS DOES NOT FALL UNDER THE EXCLUSION CLAUSE (III) OF SECTION 2(14) OF THE ACT BEING THE AGRICULTURAL LAN D. ACCORDINGLY, THE PROFIT ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 30 EARNED BY THE ASSESSEE OF SALE OF SUCH LAND CANNOT BE REGARDED AS EXEMPT INCOME U/S 2(14) OR AS AN AGRICULTURAL INCOM E IN TERMS OF DEFINITION U/S 2(1A) OF THE ACT. THE LD AR OF THE AS SESSEE HAS GIVEN MUCH EMPHASIS ON THE EXPLANATION TO SECTION 2(1A) OF THE ACT AND ALSO RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN T HE CASE OF MANUBHAI A. SETH VS N.D. NIRGUDKAR, SECOND ITO AS WELL AS DECI SION OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF J. RAGHOTT AMA REDDY VS ITO (SUPRA). SINCE THESE DECISIONS WERE BASED ON THE FAC T THAT THE LANDS WERE UNDISPUTEDLY AGRICULTURAL LANDS, THEREFORE, ONCE WE HOLD THAT THE LAND IN QUESTIONS CANNOT BE REGARDED AS AGRICULTURAL LAND A S THE SAME LOSES ITS CHARACTER OF AGRICULTURAL LAND THE MOMENT THE ASSES SEE PURCHASED THE LANDS FOR THE SOLE PURPOSE OF RESELLING TO THE COMP ANIES IN WHICH THE ASSESSEE IS A DIRECTOR AND TO BE USED FOR NON-AGRIC ULTURAL PURPOSES. THEREFORE, THESE DECISIONS CANNOT BE APPLIED IN THIS CASE. SECONDLY THOSE DECISIONS WERE CHALLENGED BY THE REVENUE BEFORE THE HON'BLE SUPREME COURT AND THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. S. MUTHYAM REDDY (SUPRA) HAS HELD AS UNDER: 1. THIS APPEAL IS BY SPECIAL LEAVE AGAINST AN ORDE R PASSED BY THE HIGH COURT OF ANDHRA PRADESH IN A BATCH OF CASES. BY THAT ORDER, THE HIGH COURT CONSIDERED THE EFFECT OF A COMBINED READING OF SECT IONS 2( 1A ) AND 2( 14 ) OF THE INCOME-TAX ACT, 1961 ('THE ACT') AND HAS HELD T HAT ( I ) CAPITAL GAINS ARISING FROM SALE OF LAND USED FOR AGRICULTURAL PUR POSES WOULD BE REVENUE DERIVED FROM SUCH LAND AND, THEREFORE, 'AGRICULTURA L INCOME' WITHIN THE DEFINITION UNDER SECTION 2( 1A ) WITH THE RESULT THAT PARLIAMENT WOULD HAVE NO LEGISLATIVE COMPETENCE TO TAX SUCH AGRICULTURAL INC OME; AND ( II ) AMENDED ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 31 SECTION 2( 14 )( III ) SHOULD BE READ DOWN TO PRESERVE ITS CONSTITUTIONA LITY. ALL LAND USED FOR AGRICULTURAL PURPOSES WHETHER SITUATE D IN AREAS MENTIONED IN SECTION 2( 14 )( III )( A ) AND ( B ) SHOULD BE HELD TO BE EXCLUDED FROM THE DEFINITION OF 'CAPITAL ASSET'. THUS SECTION 2( 14 )( III ) SHOULD READ AS EXCLUDING FROM CAPITAL ASSET AGRICULTURAL LAND IN INDIA, NOT BEING LAND SITUATED IN THE AREAS MENTIONED THEREIN. UPON SUCH INTERPRETATION, SECTION 2( 14 )( III ) DOES NOT ENABLE LEVY OF TAX ON CAPITAL GAINS ARISING FRO M TRANSFER OF LAND WHICH IS USED FOR AGRICULTURAL PURPOSES WHEREVER IT MAY BE S ITUATED. 2. IN THIS APPEAL, CHALLENGE TO THIS ORDER IS BASED ON MANY GROUNDS AND OUR ATTENTION HAS BEEN DRAWN TO SEVERAL DECISIONS NOT O NLY TAKING SIMILAR BUT ALSO A CONTRARY VIEW. THE RESPONDENTS HAVING REMAIN ED EX PARTE , WE REQUESTED SHRI DHRUV MEHTA, THE LEARNED ADVOCATE, T O ASSIST THE COURT AS AMICUS CURIAE . WE ARE BEHOLDEN FOR THE VALUABLE ASSISTANCE RENDE RED BY HIM TO THE COURT. 3. BY THE FINANCE ACT, 1989, EXPLANATION TO SECTION 2( 1A ) IS INSERTED WITH EFFECT FROM 1-4-1970 TO SUPERSEDE THE VIEW EXPRESSE D IN THE ORDER UNDER APPEAL AND SEVERAL DECISIONS SETTING OUT SIMILAR RA TIO. THIS DECLARATORY AMENDMENT HAVING RETROSPECTIVE OPERATION THOUGH COM ING INTO FORCE DURING THE PENDENCY OF THIS APPEAL MUST BE GIVEN EFFECT TO . THE SAID EXPLANATION CLEARLY DECLARES THAT THE REVENUE DERIVED FROM LAN D SHALL NOT INCLUDE AND SHALL BE DEEMED NEVER TO HAVE INCLU DED ANY INCOME ARISING FROM THE TRANSFER OF ANY LAND REFERRED TO IN SECTIO N 2( 14 )( III )( A ) OR ( B ). THE UPSHOT OF THE SAME IS THAT INCOME DERIVED FROM SALE OF SUCH AGRICULTURAL LANDS CANNOT BE TREATED AS 'AGRICULTURAL INCOME'. T HUS, THE WHOLE BASIS OF THE DECISION HAS BEEN LOST AND, THEREFORE, THE ORDER UN DER APPEAL CANNOT BE SUSTAINED AND DESERVES TO BE SET ASIDE. 4. SHRI DHRUV MEHTA POINTED OUT THAT BY AN ARTIFICIA L DEFINITION INTRODUCED INTO THE ACT WHAT IS AGRICULTURAL INCOME CANNOT BE TREAT ED OTHERWISE. HE ALSO SOUGHT TO EXPLAIN THE SCHEME OF THE ENTRIES IN THE DIFFERENT LISTS OF THE CONSTITUTION IN SUPPORT OF HIS CONTENTION. 5. THE LEARNED COUNSEL FOR THE APPELLANTS POINTED OU T THAT UNDER ARTICLE 366(1) OF THE CONSTITUTION 'AGRICULTURAL INCOME' HAS THE S AME MEANING AS DEFINED UNDER ENACTMENTS RELATING TO INCOME-TAX. THERE IS DIVERGENCE OF OPINION AMONGST THE HIGH COU RTS AS TO THE EFFECT OF SECTION 2( 14 )( III ) AS AMENDED BY THE FINANCE ACT, 1970, AND HENCE T HE PARLIAMENT INTRODUCED THE EXPLANATION BY THE FINANCE ACT, 1989 STATING THE MEANING THERETO WHICH IS IN CONFORMITY WITH THE VIE W EXPRESSED BY SOME HIGH COURTS. HE SUBMITTED, THEREFORE, DOUBTS ARISIN G AS TO INTERPRETATION BY REASON OF CONFLICT OF DECISIONS OF THE HIGH COURTS IS RESOLVED BY LAW AND SUCH A PROVISION CANNOT BE INVALID. 6. INASMUCH AS THERE IS NO CHALLENGE TO THE VALIDITY OF THE EXPLANATION TO SECTION 2( 1A ) INSERTED INTO THE ACT BY THE FINANCE ACT, 1989, W E ARE AFRAID, WE CANNOT EXAMINE THE CORRECTNESS OF THE SAID SUBMI SSION. WE LEAVE OPEN THIS QUESTION TO BE RAISED FOR CONSIDERATION IN AN APPROPRIATE PROCEEDING. ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 32 7. IN THE RESULT, WE ALLOW THIS APPEAL AND SET ASIDE THE ORDER OF THE HIGH COURT. NO ORDER AS TO COSTS. THUS, THE DECISIONS WERE SET ASIDE BY THE HON'BLE SUP REME COURT AS IT IS HELD IN PARA 3 OF THE HON'BLE SUPREME COURTS ORDER (SUPRA). ACCORDINGLY, THE DECISIONS RELIED UPON BY THE LD AR WOULD NOT HEL P THE CASE OF THE ASSESSEE. THE LD AR HAS ALSO RELIED UPON THE VARIO US DECISIONS OF THIS TRIBUNAL ON THIS POINT, HOWEVER, ALL THOSE DECISIONS WERE ON DIFFERENT SET OF FACTS AND WERE PASSED WITHOUT CONSIDERING THE DECI SION OF THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. S. MUTHYAM REDDY (SUPRA). ACCORDINGLY, THOSE DECISIONS ARE NO MORE A BINDING PRECEDENT. 7.3 IT IS PERTINENT TO NOTE THAT INCENTIVE OF EXEMP TING THE AGRICULTURAL LAND FROM DEFINITION OF CAPITAL ASSET AND CONSEQUEN TLY FROM CHARGEABILITY OF INCOME TAX IS TO ENCOURAGE THE CULTIVATION OF LA ND AND PRESERVE THE CHARACTER OF AGRICULTURAL LAND TO BE USED FOR CULTI VATION AND AGRICULTURAL OPERATIONS. THEREFORE, THE SCHEME AND THE OBJECT OF PROVIDING THESE INCENTIVES TO KEEP THE INCOME ARISING FROM AGRICULT URAL LAND EXEMPT FROM TAX IS TO PROMOTE MORE AND MORE AGRICULTURAL OPERAT IONS BY THE AGRICULTURISTS AND THE SOLE OBJECT OF THIS INCENTIV E IS NOT TO TAX THE AGRICULTURISTS WHO IS DEALING, CULTIVATING AND CARR YING OUT THE AGRICULTURAL OPERATIONS ON THE AGRICULTURAL LAND AND THEN IN CAS E IF THE SAID LAND IS SOLD THE SAME IS EXCLUDED FROM THE PURVIEW OF INCOME TAX EITHER ON CAPITAL ITA 523/JP/2012_ ACIT VS. SUNIL BANSAL 33 GAIN OR AGRICULTURAL INCOME. THEREFORE, CLAIMING THE SAID EXEMPTION BY BUSINESS PERSON MERELY BECAUSE HE HAS PURCHASED THE LAND AND THEN SOLD IT WOULD BE DEFEATING THE VERY PURPOSE OF THE INCENT IVE WHICH IS ONLY FOR THE GENUINE CULTIVATOR OF THE LAND. HENCE, IN VIEW O F THE ABOVE DISCUSSION, VARIOUS DECISIONS AND FACTS AND CIRCUMSTANCES OF TH E CASE, WE HOLD THAT THE INCOME ARISING ON SALE OF THE LANDS IN QUESTION IS NOT EXEMPT FROM INCOME TAX EITHER AS A CAPITAL GAIN U/S 2(14)(III) OR AS AN AGRICULTURAL INCOME U/S 2(1A) OF THE ACT. THIS ISSUE IS DECIDED A GAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. 8. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/11/2018 SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 6 TH NOVEMBER, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ACIT, CIRCLE-3, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- SHRI SUNIL BANSAL, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 523/JP/2012) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR