ACIT, Alwar V. FOCAL POINT BUILDERS 7 PROMOTERS P LTD., NEW DELHI

ITA 759/JPR/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5323 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 10-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARI
• Keywords: Capital asset; Business income; Earning of tax free income; Additional evidence
• Section: 40A(3); 2(14); 153A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NOS. 759/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 200 8-09. THE ACIT, CIRCULAR, ALWAR. CUKE VS. M/S. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD., A-1/296, SAFDERJUNG ENCLAVE, NEW DELHI. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAACF 6968 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI D.S. KOTHARI (CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : NONE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22.02.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 31/03/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THE PRESENT APPEAL FILED BY THE REVENUE IS ARISING FROM THE ORDER DATED 12.06.2012 PASSED BY THE LEARNED CIT (A), CENTRAL, JAIPUR FOR THE A.Y. 2008-09 WHEREBY THE FOLLOWING GROUNDS ARE RAISED AS UNDER:- 1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A)(CENTRAL), JAIPUR HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 57,39,980/- MADE ON ACCOUNT OF DISA LLOWANCE OF PROFIT IN SALE OF AGRICULTURE LAND HOLDING THAT TRANSACTIO N IN PROPERTY BY ASSESSEE COMPANY SHOULD NOT BE TREATED AS BUSINESS ACTIVITY. 2 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. 2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) (CENTRAL) JAIPUR HAS ERRED IN LAW AS WELL AS ON FAC TS IN DELETING THE ADDITION OF RS. 55,20,000/- MADE ON ACCOUNT OF DISA LLOWANCE U/S 40A(3) OF THE IT ACT, 1961. 2. BEFORE WE PROCEED TO PASS THE JUDGMENT, WE WISH TO RECORD THAT AFTER 17.12.2014 NONE APPEARED ON BEHALF OF THE ASSESSEE AND ON THE SAID DATE SHRI RAJESH KHURANA HAD APPEARED AND HAD NOTED DOWN THE NEXT DA TE OF HEARING. THEREAFTER, NONE HAS APPEARED AND, THEREFORE, THE MATTER WAS HEARD I N THE ABSENCE OF THE LD A/R FOR THE ASSESSEE. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH OPERAT ION WAS CONDUCTED ON 17.09.2008 ON THE KAMDHENU GROUP. M/S. FOCAL POINT BUILDRS & P ROMOTERS (P) LTD. WAS CONTROLLED BY SHRI ZIAULLA SHERIFF & SHRI TAFSIR AHMED DURING THE PERIOD RELEVANT TO A.Y. 2003-04. HOWEVER, THE SHAREHOLDING HAS CHANGED THE HANDS TO SHRI ROOP BANSAL AND SHRI BASANT BANSAL. IN A.Y. 2007-08 THE SHAREHOLDING AGAIN CHAN GED HAND AND IT WAS CONTROLLED BY PAHWA GROUP. THE ASSESSEE COMPANY HAS NOT DONE ANY BUSINESS ACTIVITY DURING THE PERIOD RELEVANT TO A.Y. 2003-04 TO 2007-08 EXCEPT H OLDING A LAND IN GURGAON. IN THE RELEVANT ASSESSMENT YEAR 2008-09 THE ASSESSEE COMPA NY HAD ITSELF ENGAGED IN BUYING SOME LAND PROPERTIES AND SELLING ONE OF SUCH PROPER TY DURING THE YEAR. A NOTICE UNDER SECTION 153A WAS ISSUED AND SERVED ON THE ASSESSEE AND IN PURSUANCE THEREOF, A RETURN DECLARING NIL INCOME WAS FILED ON 03.09.2010. THE ASSESSEE HAS DECLARED NIL INCOME FROM THE BUSINESS, HOWEVER, HAS DECLARED THE PROFIT ON SALE OF AGRICULTURAL LAND 3 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. AMOUNTING TO RS. 57,39,980/-. THEREFORE, THE ASSESS EE WAS CALLED UPON TO EXPLAIN AS UNDER :- IT HAS BEEN NOTED THAT THE COMPANY HAS BEEN IN T HE BUSINESS OF PURCHASING, SELLING AND DEVELOPING LAND. AS SUCH TH E PROFIT OF RS. 57,39,980/- EARNED FROM SALE OF AGRICULTURAL LAND D URING THE PREVIOUS YEAR 2007-08 RELEVANT TO A.Y. 2008-09 IS T HE BUSINESS INCOME OF THE COMPANY. SHOW-CAUSE WHY THE SAME SHOU LD NOT BE TREATED AS BUSINESS INCOME OF THE COMPANY. IN PURSUANCE THEREOF, THE ASSESSEE HAD FILED THE DE TAILED REPLY ON 03.11.2010. HOWEVER, THE AO WAS NOT CONVINCED WITH THE EXPLANAT ION GIVEN BY THE ASSESSEE AND, THEREFORE, HAS MADE AN ADDITION OF RS. 57,39,980/- ON ACCOUNT OF PROFIT EARNED ON SALE OF AGRICULTURAL LAND, TREATING THE ACTIVITY OF THE ASSESSEE AS ADVENTURE IN THE NATURE OF TRADE. THE FINDING GIVEN BY THE AO IS AS UNDER :- THE ASSESSEE COULD ONLY FILE SALE DEED OF THE PRO PERTY. IT DID NOT FILE COPY OF KHASRA GIRDAWARI TO SHOW ANY AGRICULTU RAL ACTIVITY ON THE LAND OR IT BEING THE AGRICULTURAL LAND. ALTHOUG H A CERTIFICATE FROM SURVEY LEKHPAL HAS BEEN FILED BUT IT ONLY SAYS TH AT THE VILLAGE MOTIPUR, PARGANA DUNKAUR, DISTT. GAUTAM BUDH NAGAR DOES NOT FALL WITHIN THE MUNICIPAL LIMIT AND IT IS NOT URBAN AREA BUT RURAL AREA. THE CERTIFICATE SAYS ONLY THAT LAND UNDER CONSIDERA TION WAS WITHIN MUNICIPAL LIMIT BUT IT DOES NOT CERTIFY THAT IT WAS WITHIN OR OUTSIDE 8 KILOMETERS FROM THE MUNICIPAL LIMIT. IN THE ABSENCE OF THE REQUISITE CERTIFICATE IT CAN BE SAFELY ASSUMED THAT THE LAND WAS WITHIN EIGHT KILO METRES OF MUNICIPAL LIMIT. THEREFORE, THE SAME IS NOT COVERED UNDER THE DEFINITION OF AGRICULTURAL LAND AS PER SE CTION 2(14) OF THE ACT. AS SUCH THE PROFIT ON THE SALE OF LAND UNDER CONSIDERATION IS SHORT TERM CAPITAL GAIN. EVEN IF, THE LAND IS AGRICULTURAL LAND STILL THE ASS ESSEE CANNOT BE ALLOWED TO CLAIM PROFIT ON SALE OF IT AS EXEMPTED I NCOME AS PER THE PROVISIONS OF THE INCOME TAX ACT, 1961 FOR THE REAS ON THAT THE ASSESSEE IS IN THE BUSINESS OF BUILDERS & CONTRACTO RS, PURCHASE, SALE, LEASE, HIRE, EXCHANGE OR OTHER DEAL IN LAND, PROPERTY AND OTHER PROPERTY WHETHER REAL OR PERSONAL AND TO TURN THE S AME INTO 4 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. ACCOUNT AS PER ITS MOA. NOT ONLY THE MOA BUT THE C ONDUCT OF THE ASSESSEE ALSO POINTS TOWARDS ITS BUSINESS BEING REL ATED TO REAL ESTATE WHICH INCLUDES PURCHASE & SALE OF LAND, AGRI CULTURAL OR OTHER WISE. AS CAN BE SEEN FROM THE DETAILS IN THE BALANC E SHEET FILED BY THE ASSESSEE THAT IT HAS PURCHASED 3 MORE AGRICULTU RAL LANDS DURING THE YEAR OTHER THAN THE ONE WHICH HAS BEEN PURCHASE D DURING THE YEAR AND HAS BEEN SOLD DURING THE YEAR ITSELF. SHOR T DURATION OF HOLDING OF THE LAND UNDER CONSIDERATION ALSO PROVES THAT THE LAND PURCHASED AND THEN SOLD DURING THE ITSELF WAS NOT I NTENDED FOR THE PURPOSE OF AGRICULTURE. IT HAS BEEN NOTICED FROM RE TURN OF INCOME FILED BY THE ASSESSEE FOR THE A.Y. 2003-04 TO 2009- 10 THAT ASSESSEE HAS NOT DECLARED ANY AGRICULTURAL INCOME WHICH PROV ES THAT IT IS NOT THE INTENTION OF THE ASSESSEE TO CARRY OUT ANY AGRI CULTURAL ACTIVITY IN THE LANDS PURCHASED BY THE ASSESSEE WHICH IT HAS CL AIMED TO BE AGRICULTURAL LAND. IN VIEW OF THE DISCUSSION AS ABOVE, PURCHASE AND SA LE OF AGRICULTURAL LAND BY THE ASSESSEE IS CONSIDERED TO BE AN ADVENTURE IN THE NATURE OF TRADE AND ALSO THE ASSESSEE HAS NO T BEEN ABLE TO PROVE THAT THE LAND SOLD WAS AGRICULTURAL AND WAS T HE PROFIT EARNED WAS EXEMPT. THEREFORE, ON BOTH COUNTS PROFIT RS. 57 ,39,980/- EARNED ON SALE OF LAND IS TAXABLE, THEREFORE, ADDIT ION OF RS. 57,39,980/- IS MADE TO THE INCOME OF THE ASSESSEE. SIMILARLY, THE AO AFTER GIVING THE NOTICE FOR VIOLA TION OF SECTION 40A(3) OF THE IT ACT HAS MADE THE ADDITION OF RS. 55,20,000/- AS THE ASSESSE E HAS MADE THE CASH PAYMENT OF RS. 20,00,000/- TO SHRI KISHAN S/O RAMPHAL AND RS. 35,20,000/- IN CASH TO MS ANJALEKA KRIPLANI D/O SRI MOHAN KRIPLANI FOR THE LAND PURCHA SED AT VILLAGE AMIPUR, TEHSIL & DISTT. FARIDABAD. 4. FEELING AGGRIEVED BY THE ORDER PASSED BY THE AO, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE LD. CIT (A). THE LD. CIT (A) AFTER C ONSIDERING THE REPLY OF THE ASSESSEE AND THE REMAND REPORT OF THE AO, HAS DELETED THE AD DITION OF RS. 57,39,980/-. THE REASONING GIVEN BY THE LD. CIT (A) IS AS UNDER :- 5 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. 4. I HAVE CONSIDERED THE ARGUMENT OF THE AR, THE REMAND REPORT OF THE AO AND OTHER MATERIAL ON RECORD. BEFO RE DISCUSSING THE ISSUE IT WILL BE APPROPRIATE TO FIRST CONSIDER ABOUT ADMISSIBILITY OF THE ADDITIONAL EVIDENCE FILED BY WAY OF MODIFIED CERTIFICATE FROM SURVEY LEKHPAL. IN RELATION TO ADMISSION OF ADDITIO NAL EVIDENCE, HONBLE ITAT AHMEDABAD BENCH HAS HELD IN THE CASE O F GULU G. THADANI (HUF) VS. INSPECTING ACIT (1984) 8 ITD (ALL .) 637 THAT DOCUMENT NOT IN EXISTENCE EARLIER BUT RELEVANT TO T HE ISSUE UNDER APPEAL AND THOSE IN EXISTENCE AND NOT PRODUCED BUT RELEVANT AND NECESSARY FOR PROPER DETERMINATION OF CONTROVERSY S HOULD BE ALLOWED. HONBLE SUPREME COURT HAS HELD IN CASE OF JAIPUR DEVELOPMENT AUTHORITY VS. KAILASHWATI DEVI AIR 1997 (SC) 3243 THAT PERMISSION TO ADDUCE ADDITIONAL EVIDENCE CANNO T BE REFUSED ON THE GROUND THAT THE PARTY HAS NOT ADDUCED ANY EVIDE NCE IN THE TRIAL COURT. IN THE CASE OF SHIVAJIRAO, HONBLE SUPREME COURT HA S LAID DOWN THE BASIC PRINCIPLES FOR ADMISSION OF THE ADDITIONAL EV IDENCE, WHICH INTER ALIA INCLUDES THAT SUCH EVIDENCE IS RELEVANT FOR DETERMINATION OF THE ISSUE. CONSIDERING THE FACTS AND CIRCUMSTANCE OF THE CASE AND DECISIONS OF THE VARIOUS COURTS, WHEREAS IT HAS BEEN HELD THAT I N THE INTEREST OF JUSTICE AND FOR PROPER DETERMINATION OF THE INCOME, THE ADDITIONAL EVIDENCE MAY BE ADMITTED, THE ADDITIONAL EVIDENCES ARE ALLOWED TO BE ADMITTED IN THE INSTANT CASE OF APPELLANT. 4.1. NOW COMING TO THE MERITS OF THE CASE, IT IS UN DISPUTED FACT THAT THE APPELLANT COMPANY HAS NOT BEEN ENGAGED IN ANY BUSINESS FROM A.Y. 2003-04 TO A.Y. 2008-09 AND EVEN TILL THE PASSING OF THE ASSESSMENT ORDER, THOUGH THE MAIN OBJECT AS SEEN FR OM THE MOA ALSO INCLUDE ACTIVITY OF BUILDER. BUT THE UNDISPUTE D FACT IS THAT THE COMPANY HAD NEVER TAKEN UP ANY BUSINESS ACTIVITY IN THESE YEARS, WHAT TO TALK OF ACTIVITY OF BUILDERS & PROMOTERS, W HICH HAS BEEN USED BY THE AO AS A BASIS FOR TREATING THE SALE OF AGRICULTURAL LAND AS ADVENTURE IN THE NATURE OF TRADE. THE AO IS RIGH T IN MENTIONING THAT THE FACTS AND THE CIRCUMSTANCES OF THE CASE WI LL DECIDE WHETHER THE PARTICULAR ACTIVITY OF THE ASSESSEE IS ACTIVITY OF SALE OF AGRICULTURE LAND OR IT IS ESSENTIALLY ADVENTURE IN THE NATURE OF TRADE. THE HONBLE COURTS, WHILE DECIDING SUCH MATTERS, HA VE GONE INTO THE FACTS OF THE CASE AND IN MOST OF THE CASES THE COURTS HAVE DECIDED AGAINST THE DEPARTMENT AND IN FAVOUR OF APP ELLANT. IT IS 6 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. ONLY IN THOSE CASES WHERE THERE IS SYSTEMATIC ACTIV ITY CARRIED OUT BY THE ASSESSEE RIGHT FROM THE TIME OF PURCHASE OF THE LAND AND ALSO THEREAFTER BY WAY OF MAKING IMPROVEMENT IN THE LAND WITH THE INTENTION TO RESELL IT AT PROFIT, BY DE-MARKING AND DIVIDING IT INTO SMALLER PIECES/PLOTS AND BY LAYING KACHHA/PUKKA ROA DS ETC. THAT THE COURTS HAVE DECIDED IN FAVOUR OF DEPARTMENT. IN TH E INSTANT CASE UNDISPUTEDLY NO SUCH ACTIVITY HAS BEEN CARRIED OUT BY THE APPELLANT ON THE SAID AGRICULTURAL LAND. THE APPELLANT HAS NO T CONVERTED THE LAND INTO NON-AGRICULTURE LAND; THE APPELLANT HAS N OT DIVIDED THE SAID AGRICULTURE LAND INTO SMALLER PIECES. CONDUCT OF THE APPELLANT DOES NOT IN ANY WAY REFLECT ANY INTENTION TO HAVE A DVENTURE IN NATURE OF TRADE. THE OTHER CIRCUMSTANTIAL EVIDENCE ALSO SUPPORT THIS FACT. IT IS SEEN THAT APPELLANT HAS PURCHASED THREE DIFFERENT AGRICULTURE LANDS IN DIFFERENT YEARS AND IN NONE OF THE AGRICULTURE LAND ANY SUCH ACTIVITY OF DEVELOPING THE LAND AS BU ILDER OR DEVELOPER WAS TAKEN UP TILL THE YEAR UNDER CONSIDER ATION OR EVEN THEREAFTER. MOREOVER THESE AGRICULTURE LANDS WERE S HOWN AS PART OF THE FIXED ASSETS AND NOT AS STOCK-IN-TRADE. 4.2. THE AR HAS ALSO COUNTERED THE ONLY DECISION RE FERRED BY THE AO I.E. IN THE CASE OF M/S. SUTLEJ COTTON MILLS SUP PLY AGENCY. THE FACTS OF THE REPORTED CASE ARE THAT THE SAID ASSESS EE APPLIED FOR PURCHASE OF SHARES OF GAWLIOR RAYON SILK MANUFACTUR ING COMPANY LTD. THE ASSESSEE HAS SOLD PART OF THE SHARES AND INCLUDED THE PROFIT IN THE PROFIT AND LOSS ACCOUNT; THE ASSESSEE HAS PURCHASED SHARES FROM BORROWED MONEY AND NOT WITH THE MONEY R EADILY AVAILABLE TO IT; THE ASSESSEE HAD IN THE PAST DEALT IN THE SHARES AS BUSINESS TRANSACTION. CONSIDERING THESE FACTS THE HONBLE HIGH COURT HELD IT TO BE ADVENTURE IN THE NATURE OF TRAD E. THE HONBLE SUPREME COURT HAS CONCURRED WITH DECISION OF HONBL E HIGH COURT. HOWEVER, IN THE INSTANT CASE OF THE APPELLANT THE F ACTS ARE QUITE DIFFERENT. THE APPELLANT HAS NOT INCLUDED THE PROF IT ON SALE OF AGRICULTURE LAND IN THE PROFIT AND LOSS ACCOUNT. TH E APPELLANT HAS NOT INCLUDED THE PROFIT ON SALE OF AGRICULTURE LAND IN THE PROFIT AND LOSS ACCOUNT. THE APPELLANT HAS NOT SOLD ANY LAND I N THE PAST YEARS WHAT TO TALK OF THE SALE OF LAND IN PAST YEARS AS B USINESS TRANSACTION. THE APPELLANT HAS NOT PURCHASED THE IM PUGNED AGRICULTURE LAND BY TAKING LOAN FOR THE PURPOSE OF EARNING PROFIT. ACCORDINGLY THE CASE LAW REFERRED BY THE AO IS NOT AT ALL APPLICABLE TO THE FACTS OF THE APPELLANTS CASE. 7 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. 4.3. ACCORDINGLY IN VIEW OF THE FACTS AND THE CIRCU MSTANCES OF THE CASE COUPLED WITH THE LEGAL POSITION ON THE ISSUE, IT IS NOT POSSIBLE TO SUSTAIN THE FINDING OF THE AO THAT THE SALE OF I MPUGNED AGRICULTURE LAND IS ESSENTIALLY ADVENTURE IN NATURE OF TRADE. 4.4. NOW COMING TO THE ISSUE WHETHER THE IMPUGNED L AND WAS THE AGRICULTURE LAND WITHIN THE MEANING OF SEC. 2(1 4) OF IT ACT OR NOT. FROM THE PERUSAL OF THE ASSESSMENT ORDER, IT I S SEEN THAT THOUGH THE CERTIFICATE FROM THE SURVEY LEKHPAL PROD UCED BY THE APPELLANT DURING THE ASSESSMENT PROCEEDING SAYS THA T VILLAGE MOTIPUR, PARGANA-DUNKAUR, DIST. GAUTAM BUDH NAGAR I S BASICALLY A VILLAGE AND RURAL AREA AND IS NOT URBAN AREA, HENCE IT DOES NOT FALL WITHIN ANY MUNICIPAL LIMIT, BUT THE AO WAS OF THE V IEW THAT IN ABSENCE OF THE CERTIFICATION THAT IMPUGNED LAND WAS WITHIN OR OUTSIDE 8 KMS. FROM THE MUNICIPAL LIMITS, IT CAN BE SAFELY ASSUMED THAT THE LAND WAS WITHIN 8 KMS OF MUNICIPAL LIMITS AND HENCE IS NOT AGRICULTURE LAND. THE AR HAS RIGHTLY ARGUED THAT AO HAS JUST PRESUMED THAT LAND WAS WITHIN 8 KMS. ONLY IN ABSENC E OF ANY MENTION OF DISTANCE BY THE SURVEY LEKHPAL BY IGNORI NG THE DETAILS AND SUBMISSION MADE BY THE AR IN THE ASSESSMENT PRO CEEDING. THE AR HAS FURNISHED ANOTHER CERTIFICATE FROM SURVEY LE KHPAL AS ADDITIONAL EVIDENCE IN THE APPELLATE PROCEEDINGS WH EREIN THE DISTANCE OF THE VILLAGE MOTIPUR CONTAINING IMPUGNED LAND IS MENTIONED TO BE MORE THAN 10 KMS FROM NEARBY MUNICI PAL LIMITS. IT IS ALREADY ON THE RECORD OF THE AO DURING THE ASSES SMENT PROCEEDING THAT IMPUGNED LAND IS IN VILLAGE MOTIPUR AND THE POPULATION OF THE VILLAGE MOTIPUR IS LESS THAN 10 T HOUSAND. MOREOVER THERE IS NO MUNICIPALITY IN THE VILLAGE MO TIPUR. CONSIDERING THESE FACTS, THE OBSERVATION OF THE AO SO MADE IN THE ASSESSMENT ORDER ONLY ON THE BASIS OF ASSUMPTION TH AT LAND IS WITHIN 8 KMS. OF MUNICIPAL LIMIT AND HENCE NOT AGRI CULTURE LAND AS PER SEC 2(14) OF THE I T ACT, IS NOT SUSTAINABLE PA RTICULARLY CONSIDERING THE CERTIFICATE NOW FILED IN APPELLATE PROCEEDING WHICH MENTIONS THE DISTANCE BEING MORE THAN 10 KMS. IT SE EMS THAT THE SURVEY LEKHPAL INCIDENTALLY HAS ISSUED THIS CERTIFI CATE FILED AS ADDITIONAL EVIDENCE PUTTING THE SAME DATE AS OF THE EARLIER CERTIFICATE, SINCE THIS MODIFIED CERTIFICATE WAS TA KEN JUST AFTER FEW DAYS OF THE FIRST CERTIFICATE I.E. AFTER THE ASSESS MENT ORDER WAS PASSED. IN ANY CASE THE APPELLANT HAS FILED ANOTHER LETTER WHEREIN ON REQUEST MADE BY THE APPELLANT IN THE APPLICATION GIVING DETAILS OF THE AGRICULTURE LAND, THE SURVEY LEKHPAL HAS CER TIFIED VIDE HIS SIGNATURE DATED 1.6.2012 THAT VILLAGE MOTIPUR (WHER E THE IMPUGNED 8 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. AGRICULTURE LAND IS SITUATED) DOES NOT COME IN ANY MUNICIPAL LIMIT AND IT IS MORE THAN 10 KMS. AWAY FROM MUNICIPAL LIM IT OF DADRI AND MOREOVER THE POPULATION IS ALSO LESS THAN TEN THOUS AND. CONSIDERING THESE FACTS IT IS CLEAR THAT THE IMPUGN ED LAND IS AGRICULTURE LAND WITHIN THE MEANING OF SEC. 2(14) O F IT ACT AND ON THIS ACCOUNT ALSO NO ADDITION NEED TO BE MADE. ACCO RDINGLY ADDITION MADE BY THE AO AMOUNTING TO RS. 57,39,980/- IS HERE BY DELETED. 4.1. SIMILARLY, THE LD. CIT (A) HAS ALSO DELETED TH E ADDITION OF RS. 55,20,000/- UNDER SECTION 40A(3) FOR THE FOLLOWING REASONS :- 5.3. I HAVE CONSIDERED THE ARGUMENTS OF AR AND PE RUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED THAT APPELLANT HAS SHOWN THE PURCHASE OF IMPUGNED AGRICULTURE LANDS (WHEREIN PAR T OF THE PAYMENT HAVE BEEN MADE IN CASH) AS PART OF FIXED AS SET, AS IS EVIDENT FROM THE BALANCE SHEET. EVEN THE CONDUCT OF THE APPELLANT DOES NOT IN ANY WAY REFLECT THAT THESE AGRICULTURE LANDS HAVE BEEN PURCHASED AS PART OF THE STOCK-IN-TRADE. IN FACT, A S ALREADY DISCUSSED WHILE DECIDING THE EARLIER GROUND, THAT T HE APPELLANT HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY IN THE YEAR U NDER CONSIDERATION AND EVEN IN EARLIER YEARS FROM A.Y. 2003-04 TO A.Y. 2007-08 AND ALSO EVEN IN SUBSEQUENT 1-2 YEARS. IT IS THE SETTLE D LAW THAT SEC. 40A(3) IS APPLICABLE ON THE EXPENDITURE INCURRED WH ICH INCLUDES THE EXPENDITURE FOR PURCHASE OF STOCK-IN-TRADE AS HAD B EEN HELD BY HONBLE SUPREME COURT IN THE CASE OF ATTAR SINGH GU RUMUKH SINGH (SUPRA) AND SEC. 40A(3) IS NOT AT ALL APPLICABLE FO R PURCHASE OF FIXED ASSETS. IN THE INSTANT CASE, UNDISPUTEDLY THE PURC HASE OF LAND IS PART OF PURCHASE OF FIXED ASSET AND IS NOT PART OF THE STOCK-IN-TRADE. THE AOS OBSERVATION THAT APPELLANT IS IN THE BUSIN ESS OF PURCHASE AND SELL OF LAND, IS COUNTRY TO THE FACTS ON RECORD , AS DISCUSSED HERE-IN-ABOVE IN BRIEF AND ALSO DISCUSSED WHILE DEC IDING EARLIER GROUND. IN ANY CASE EVEN THE FINDING OF THE AO OF P URCHASE AND SUBSEQUENT SALE OF THE AGRICULTURE LAND BEING TREAT ED AS ADVENTURE IN NATURE OF TRADE (THOUGH IT WAS ONLY ONE ISOLATED TRANSACTION) HAS BEEN FOUND TO BE NOT SUSTAINABLE, AS DISCUSSED IN T HE EARLIER GROUND. ACCORDINGLY ON THIS COUNT ALSO IT IS UNDISP UTED THAT THE PURCHASE OF AGRICULTURE LAND IS PART OF FIXED ASSET AND NOT STOCK-IN- TRADE. 9 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. 5.4. IN TOTALITY THE FACTS AND CIRCUMSTANCES AND LE GAL POSITION ON THE ISSUE UNDER CONSIDERATION, IT IS CLEARLY EVIDEN T THAT PROVISIONS OF SEC. 40A(3) ARE NOT ATTRACTED IN THE INSTANT CASE O F THE APPELLANT IN RELATION TO PURCHASE OF AGRICULTURE LAND AND, THERE FORE, THE DISALLOWANCE/ADDITION MADE BY THE AO U/S 40A(3) AMO UNTING TO RS. 55.20 LACS IS HEREBY DELETED. 5. NOW THE REVENUE IS BEFORE US. WE HAVE HEARD THE ARGUMENTS ADDRESSED ON BEHALF OF THE REVENUE AND HAVE ALSO GONE THROUGH WR ITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE. 5.1. THE LD D/R FOR THE REVENUE HAS SUBMITTED THAT AO HAS DEMONSTRATED THAT THE LAND PURCHASED BY THE ASSESSEE WAS NOT MEANT FOR CA RRYING OUT AGRICULTURAL ACTIVITIES BUT WITH THE MAIN OBJECT TO MAKE PROFITS BY SELLING IT TO BUILDERS AND DEVELOPERS. RELIANCE IS PLACED ON FOLLOWING CASE LAWS FOR THE P ROPOSITION THAT IN SUCH CIRCUMSTANCES THE ADDITION CAN BE MADE : ( I ) SUTLEJ COTTON MILLS SUPPLY AGENCY ( SUPRA ); ( II ) R.DALMIA V. CIT [1982] 137 ITR 665/[1981] 7 TAXMAN 284 (DELHI) ; ( III ) JAWAHAR DEVELOPMENT ASSOCIATION ( SUPRA ); ( IV ) KEDARNATH JUTE MANUFACTURING CO. LTD. ( SUPRA ). 5.2. COMING TO THE LEGAL ARGUMENTS, S. 2(LA)/2(14)( III) R/W S. 10(1), LEARNED D/R CONTENDS THAT THE MAIN ARGUMENT OF THE ASSESSEE IS TO THE EFFECT THAT THE LAND IN QUESTION IS OUTSIDE THE SPECIFIED MUNICIPAL LIMITS AND SUCH LAND BEING NOT A CAPITAL ASSET 10 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. IS NOT LIABLE TO INCOME-TAX. AO HAS NOT TAXED THE G AINS ON THE BASIS THAT PURCHASE AND SALE OF LAND BY THE ASSESSEE IS AN ADVENTURE IN THE NATURE OF TRADE AND THE SURPLUS IS LIABLE TO BE TAXED AS BUSINESS INCOME. AS PER S. 2( 13) OF THE IT ACT, BUSINESS INCLUDES ANY TRADE, COMMERCE OR MANUFACTURING OR ANY ADVENTU RE OR CONCERN IN THE NATURE OF TRADE. IN THE CASE OF R. DALMIA ( SUPRA ) THE HON'BLE DELHI HIGH COURT HAS HELD THAT FOR DETERMINING THE NATURE OF THE TRANSACTION THE DOMIN ANT INTENTION OF THE ASSESSEE IS TO BE SEEN. 5.3. TO DETERMINE THAT ASSESSEE'S VENTURE WAS IN TH E NATURE OF TRADE OR FROM A CAPITAL INVESTMENT, ENTRIES IN THE BOOKS OF ACCOUNTS ARE NO T MATERIAL AND THE REAL NATURE OF TRANSACTION IS TO BE SEEN. RELIANCE IS PLACED ON HO N'BLE SUPREME COURT JUDGMENT IN THE CASE OF KEDARNATH JUTE MANUFACTURING CO. LTD. ( SUPRA ). IT IS FURTHER PLEADED THAT THE MOA OF THE ASSESSEE NOWHERE PROVIDES THAT IT WILL B E PURCHASING AGRICULTURAL LAND FOR CARRYING OUT AGRICULTURAL OPERATION OR FOR KEEPING SUCH LAND FOR LONG-TERM BASIS. THUS, THE AGRICULTURAL ACTIVITY CLAIMED TO BE CARRIED ON BY THE ASSESSEE IS NEITHER A MAJOR NOR AN INCIDENTAL OBJECT OF THE ASSESSEE COMPANY. THE S HORT PERIOD OF HOLDING AND THE AMOUNT OF HUGE EARNING ITSELF INDICATES THAT THE OB JECT OF THE ASSESSEE WAS NOT TO HOLD THE LAND AS AGRICULTURAL LAND BUT TO ENGAGE IN THE BUSINESS OF SELLING IT TO EARN HUGE PROFITS. IT IS PLEADED THAT, THEREFORE, THE ADDITIO N HAS BEEN RIGHTLY CONFIRMED BY THE LOWER AUTHORITIES. 11 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. 5.4. THE TRANSACTION OF AGRICULTURAL LAND WHICH HAS RESULTED INTO A PROFIT OF RS.57,39,980/-WHICH THE ASSESSEE HAS CLAIMED EXEMPT BY TREATING THE SAME AS FIXED ASSETS, IS AN ADVENTURE IN THE NATURE OF TRADE. 5.5. THE PROPERTY UNDER CONSIDERATION WAS PURCHASED IN THE YEAR AND WAS SOLD IN THE YEAR ITSELF. PERIOD OF HOLDING OF THE PROPERTY ALSO INDICATES THAT THE PROPERTY THOUGH AGRICULTURAL LAND WAS PURCHASED WITH A PROFIT MOTIV E. COUPLED WITH THE FACT THAT THE'BUSINESS OF THE ASSESSEE COMPANY IS DEALING IN REAL ESTATE, THEREFORE, THE PROFIT EARNED ON SALE OF AGRICULTURAL LAND IS BUSINESS INC OME OFTHE ASSESSEE WHICH IS TAXABLE AS PER THE PROVISIONS OF THE INCOME-TAX ACT. 5.6. ON THE OTHER HAND, IN THE WRITTEN SUBMISSION T HE LD AR FOR THE ASSESSEE HAS SUBMITTED THAT - 1. THE ASSESSEE HAS EXPLAINED THAT GENERALLY TO CARRY ON BUSINESS ACTIVITIES THE CHANGE IN LAND USE IS NECESSARY WHICH IS BASIC REQU IREMENT FOR BUSINESS ACTIVITY PROPOSED TO BE CARRIED ON. SUCH INTENTION MAKES IT NECESSARY TO TAKE VARIOUS ACTIONS FOR BUSINESS LICENCE ETC. SINCE THE INTENTI ON TO CREATE SUCH BUSINESS OPPORTUNITY WAS ABSENT, HENCE SUCH ACTION WAS NOT T AKEN WHICH CLEARLY EXPLAINS THE CONDUCT OF ASSESSEE THAT IT DID NOT WANT TO CRE ATE ANY BUSINESS VENTURE. SUCH ACTIONS LIKE IMPROVING THE LAND, CONVERTING IT FOR NON-AGRICULTURAL PURPOSES, DIVIDING THE LAND INTO SMALLER PIECES ARE GENERALLY DONE, IF ONE HAS TO DO BUSINESS ACTIVITY. 12 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. 2. THE ASSESSEE HAS ALSO EXPLAINED THAT THIS LAND HAS NOT BEEN FOUND SUITABLE FOR ITS PRODUCTIVE USE AS AN ,AGRICULTURAL LAND. BECAUS E ITS EFFECTIVE USE AS AN AGRICULTURAL LAND HAS BEEN THE BASIC MOTIVE WHEN IT WAS PURCHASED, WHICH WHEN FOUND NON-ACHIEVABLE, ENFORCED THE ASSESSEE TO SELL THE LAND. 3. THE LAND SUBSEQUENTLY PURCHASED AS AGRICULTURAL LAN D HAS BEEN CONTINUED TO BE AGRICULTURAL LAND WHICH IS NOT AT ALL THE SUBJECT M ATTER OF DOUBT AND AO HAS REMAINED SILENT ON THIS FACT WHICH IS APPARENT FROM THE SALE DEEDS ALSO. 4. THERE WAS NO COMMERCIAL MOTIVE TO PURCHASE OR SELL THE AGRICU LTURAL LAND BECAUSE WHEN IT WAS PURCHASED, THERE IS NO EXISTENC E OF SITUATION BEFORE ASSESSEE LIKE HAVING AVAILED SOME LOAN FACILITY WHI CH ENFORCE THE ASSESSEE TO HAVE SOME BUSINESS STRATEGY TO SCALE DOWN THE OUTSI DE LIABILITY; TO SAVE THE COMPAN Y FROM HIGH VALUE FINANCIAL COMMITMENT OR TO SAVE THE COMPANY FROM INTEREST OBLIGATION. 5. THE ASSESSEE PLEADED THAT AGRICULTURAL LAND HAS NOT BEEN TR EATED AS STOCK IN TRADE AT ALL. EVEN THE AGRICULTURAL LAND OTHER THAN THE ABOVE MENTIONED AGRICULTURAL LAND HAS BEEN TREATED AS FIXED ASSETS. HENCE , AN Y E XTRA-ORDINARY INFERENCE MAY NOT BE DRAWN IN THE CASE OF ASSESSEE, WHICH IS CONTRA RY TO TH E F ACTS ON RECORD . 6. SMALLER PERIOD OF HOLDING OF AGRICULTURAL LAND DOES N OT MAKE AN AGRICULTURAL LAND INTO COMMERCIAL, INDUSTRIAL OR RESIDENTIAL LAND OR , CH ANGES ITS CHARACTER AS AGRICULTURAL LANDS. PERIOD OF HOLDING HAS SIGNIFICA NC E WHEN A SSESSMENT AS CAPITAL 13 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. GAIN IS MADE OR PROPOSED , HENCE , THIS OBSER VATION IS CORIT RADICTORY T O ASSESSMENT OF ITS PROFIT AS BUSINESS INCOME. 7. DOMINANT INTENTION IS CLEARLY APPARENT FROM CONDUCT THAT T HERE A RE NO SALE OF AGRICULTURE LAND IN THE SUBSEQUENT YEAR AND ALL THE AGRICULTUR AL L ANDS ARE EXISTING AS AGRICULTURAL LANDS ONLY AND TILL DATE THERE IS N O ACTION ABOU T CON VERSION! LAND USE CHARGES ETC OF EXISTING AGRICULTURE LANDS IN HA ND. EVEN IN TH E IMPUGNED AGRICULTURAL LAND, NO ANY ACTIVITY RELATED T O CONVERSION OR LAND USE CH ANGE O R ANY ACTIVITY OF SUCH NATURE WAS CARRIED OUT. THUS THE D OMINANT INTENTION OF KEEPING THE LAND ONLY AS AGRICULTURE LAND WAS QUITE CLEA R. 5.7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. IN OUR VIEW, THE MAIN ALLEGATION OF THE ASS ESSING OFFICER IS TO THE EFFECT THAT THE ASSESSEE IS A BUILDING COMPANY WITH A MAIN OBJECTS TO ACQUIRE LAND AND DEVELOP IT AND IN THAT PROCESS IT HAS ACQUIRED THE AGRICULTURE LAN D WHICH IS THE SUBJECT MATTER OF ASSESSMENT PROCEEDINGS UNDER CONSIDERATION . ON THE BASIS OF THIS , ASSESSING OFFICER HAS DRAWN THE INFLUENCE THAT GROUP TAKEN AS A WHOLE WAS ENGAGED IN VARIOUS ACTIVITIES OF REAL ESTATE DEVELOPMENT, THEREFORE, THE ASSESSEE IS ENGAGED IN REAL ESTATE BUSINESS. IN OUR CONSIDERED VIEW HIS ASSUMPTION HAS NO LEGS T O STAND. FIRST OF ALL, ASSESSING OFFICERS HAS NOT SHOWN ANY ACTIVITIES OF THE ASSESS EE WHICH HAS A MANIFESTATION OF DOING THE BUSINESS BY ACQUIRING AND SELLING THE LAND THRO UGH THE COLOURABLE DEVICES. THEIR ACTIVITIES ARE TO BE ANALYZED ON THE BASIS OF ACTUA L ACTIVITIES AND CANNOT BE IGNORED 14 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. MERELY BECAUSE OF THE NAME OF THE COMPANY . IHUS, T HIS INFERENCE BY LOWER AUTHORITIES AMOUNTS TO A PURE GUESSWORK AND CONJECTURE WHICH WE ARE UNABLE TO SUBSCRIBE. FURTHER, IT . HAS BEEN DEMONSTRATED BY THE ASSESSEE THAT IT WAS MAINLY SOLITARY TRANSACTION OF THE ASSESSEE TO HOLD THE AGRICULTURA L LAND IN QUESTION AS FIXED ASSET, CARRY OUT AGRICULTURAL OPERATION THEREON AND SELL IT AS A GRICULTURAL LAND. WE DO NOT FIND ANY FACTS ON RECORD TO HOLD ANY OTHER VIEW. THUS, WE AR E UNABLE TO SUBSCRIBE THE VIEW THAT ASSESSEE WAS ENGAGED IN ADVENTURE IN THE NATURE OF TRADE. 5.8. COMING TO THE NATURE OF AGRICULTURAL LAND AND ITS GEOGRAPHY, IT HAS NOT BEEN DISPUTED THAT THE LAND IN QUESTION WAS SITUATED OUT SIDE THE SPECIFIED MUNICIPAL LIMITS AND AS PER THE PRESCRIPTION OF S.2(14) IT DOES NOT AMOUNT TO AN ASSET. IN ORDER TO COME UNDER THE REALM OF CAPITAL GAINS, THE LAW (SNIC-LAN D) HAS FIRST TO QUALIFY AS AN ASSET AS PER IT ACT. THE INCOME ARISING FROM THE SALE OF AGR ICULTURAL LAND FALLS UNDER S. 2(14)(III) R/W - S. 10(1) AND IS TO BE TREATED AS AGRICULTURAL INCOME. THE INTERPRETATION PUT BY THE LOWER AUTHORITIES IS OUTLANDISH AND BASED ON SURMIS ES AND CONJECTURES, DIVORCED FROM THE ACTUAL FACTS. IN OUR VIEW THERE IS NO PROHIBITI ON EVEN FOR A LAND DEVELOPING COMPANY TO ACQUIRE AND HOLD THE AGRICULTURAL LAND FOR THE P URPOSES OF CONDUCTING THE AGRICULTURE ACTIVITIES. THE COMPANY MAY BE INTO TO DEVELOPMENT OF LAND BUT THAT DOES NOT ITSELF MAKE THE ACTIVITY ( HOLDING OF AGRICULTURAL LAND) A S A BUSINESS ACTIVITIES. 5.9. APROPOS THE LOWER AUTHORITIES HOLDING THAT TH E ASSESSEE WAS INTO ADVENTURE IN THE NATURE OF TRADE, THEREFORE, THE NATURE, GEOGRAP HY AND ACTIVITY OF THE LAND SHOULD BE IGNORED, THE STATUTORY PROVISIONS SHOULD BE GIVEN A GO BYE AND ASSESSEE IS TO BE 15 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. SOMEHOW HELD AS ENGAGED IN THE ADVENTURE IN THE NAT URE OF TRADE AND TAXED ON EXEMPT INCOME. IN OUR VIEW, THERE IS NO ENABLING PROVISION IN THE INCOME-TAX LAW PRESCRIBING THAT EVEN IF THE ASSESSEE'S INCOME IS EXEMPT BY A P ROVISION, THEN IT CAN BE FORCIBLY BROUGHT INTO THE TAX NET BY ASSUMING THE ASSESSEE'S ACTIVITY TO BE ADVENTURE IN THE NATURE OF TRADE. IT IS A SETTLED POSITION BY HON'BL E DELHI HIGH COURT IN DELHI APARTMENTS (P) LTD. ( SUPRA ) AND D.L.F. UNITED LTD. ( SUPRA ) THAT REAL ESTATE COMPANIES CAN ALSO HOLD SEPARATE PORTFOLIO OF LAND AS STOCK-IN-TRADE AND AS INVESTMENT PORTFOLIO; THE SALE OF INVESTMENT PORTFOLIO IS ALWAYS TAXED AS CAPITAL GAI NS. THUS, ASSUMING WORST AGAINST ASSESSEE, EVEN IF IT IS INFERRED THAT IT HAS CARRIE D ON BUSINESS ACTIVITY SO LONG AS IT HOLDS SPECIFIED AGRICULTURAL LAND IN TERMS OF S. 2(14) IN ,I,E. NOT BEING AN ASSET, ITS TRANSFER WILL NEITHER ATTRACT CAPITAL GAIN TAX NOR CAN BE TREATED AS BUSINESS INCOME. IN VIEW OF THE FOREGOING AND RESPECTFULLY FOLLOWING THE CASE LAW C ITED BY THE ASSESSEE WE HAVE NO HESITATION BUT TO HELD THAT THE ASSESSEE'S GAINS WE RE PROFITS FROM SALE OF SPECIFIED AGRICULTURAL LAND WHICH DOES NOT COME WITHIN THE DE FINITION OF ASSET AS PRESCRIBED UNDER S. 2(14) AND BY VIRTUE OF S. 2(LA)(A) R/W S, 2(14)( III) R/W S. 10(1) THE ASSESSEE'S GAINS FROM SALE OF SUCH AGRICULTURAL LAND ARE EXEMPT INCO ME. THUS, ASSESSEE SUCCEEDS ON ALL THE COUNTS. 6. SECOND GROUND OF THE REVENUES APPEAL IS IN RESP ECT OF DELETION OF ADDITION OF RS. 55,20,000/- MADE ON ACCOUNT OF DISALLOWANCE UNDER S ECTION 40A(3) OF THE IT ACT. THE PERUSAL OF THE ASSESSMENT ORDER PASSED BY THE AO SH OWS THAT VIDE SALE DEED DATED 19.07.2007 THE LAND WAS PURCHASED AND A SUM OF RS. 20,00,000/- WAS PAID IN CASH TO 16 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. SHRI KISHAN S/O RAMPHAL AND RS. 35,20,000/- WAS PAI D IN CASH TO MS ANJALEKA KRIPLANI D/O SHRI MOHAN KRIPLANI. ON THE BASIS OF PAYMENT M ADE IN CASH, THE AO HAS INVOKED THE PROVISIONS OF SECTION 40A(3) ON THE PREMISE THA T THE ACTIVITY OF THE ASSESSEE IS IN THE NATURE OF ADVENTURE AND, THEREFORE, THE LAND PU RCHASED BY THE ASSESSEE COMPANY IS STOCK-IN-TRADE AND, THEREFORE, IN VIEW OF THE JUDGE MENT OF HONBLE SUPREME COURT IN THE CASE OF ATTAR SINGH GURMUKH SINGH VS. ITO, LUDHIANA , 191 ITR 667, PROVISIONS OF SECTION 40A(3) WERE ATTRACTED. 6.1 THE MATTER WAS ASSAILED BY THE ASSESSEE BEFORE THE LD. CIT (A) AND THE LD. CIT (A) HAS DELETED THE ADDITION ON THE GROUND MENTIONE D IN THE APPELLATE ORDER. 7. NOW THE REVENUE IS BEFORE US. 7.1 WE HAVE PERUSED THE WRITTEN SUBMISSIONS AND ALS O GONE THROUGH THE ORDERS PASSED BY THE AUTHORITIES BELOW AND HAVE ALSO NOTED DOWN THE ARGUMENTS OF THE REVENUE. WHILE ADJUDICATING THE FIRST ISSUE, WE HA VE HELD THAT THE INVESTMENT MADE BY THE ASSESSEE WAS NOT IN THE NATURE OF ADVENTURE AND IN THE NATURE OF TRADE AND HAVE ALSO HELD THAT THE SALE AND PURCHASE OF LAND IN INV ESTMENT PORTFOLIO OF THE ASSESSEE. SINCE IT WAS MERELY AN INVESTMENT PORTFOLIO, THEREF ORE, THE ACTIVITIES OF THE ASSESSEE WAS NOT IN THE NATURE OF ADVENTURE OF TRADE. HOWEV ER THE PURCHASE OF LAND WAS AN INVESTMENT AND WAS NOT STOCK IN TRADE. THE CASH PAY MENT MADE BY THE ASSESSEE EXCEEDING RS. 20,000/- HAVE DULY BEEN EXPLAINED BY THE ASSESSEE. THE AO HAS NEITHER DOUBTED THE TRANSACTION NOR IT HAS DOUBTED EVEN TH E REGISTRATION OF SALE DEED NOR IT 17 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. HAS DOUBTED THE AMOUNT. SINCE THE AO HAS NOT DOUBT ED ANY OF THE ABOVE AND FURTHER THE LAND PURCHASE WAS IN THE NATURE OF INVESTMENT A ND, THEREFORE, FOLLOWING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F ATTAR SINGH GURMUKH SINGH VS. ITO (SUPRA) AND ALSO FOLLOWING THE HONBLE JURISDIC TIONAL HIGH COURT IN THE MATTER OF SMT. HARSHILA CHORDIA VS. ITO, 298 ITR 349 (RAJ.) W HICH WAS RELIED UPON BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE MATTER OF GURDAS GARG VS. CIT, 63 TAXMANN.COM 289 (P&H) WHEREBY IT HAS BEEN HELD THAT THE RIGOUR OF SECTION 40A(3) ARE NOT ATTRACTED. IN THE LIGHT OF THE ABOVE, THE GROUND OF THE REVENU E IS BOUND TO FAIL AND IS HERE BY DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 31/03/2016 . SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31 /03/2016. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-THE ACIT, CENTRAL CIRCLE, ALWAR. 2. IZR;FKHZ@ THE RESPONDENT-M/S. FOCAL POINT BUILDERS & PROMOTER S PVT. LTD., NEW DELHI. 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. 759/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 18 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD. 19 ITA NO. 759/JP/2012 ACIT VS. FOCAL POINT BUILDERS & PROMOTERS PVT. LTD.