ACIT Cen Cir 1 [1] Pune., Pune v. Shri Bharat Keshavlal Shah,, Pune

ITA 554/PUN/2012 | 2007-2008
Pronouncement Date: 30-07-2013 | Result: Dismissed

Appeal Details

RSA Number 55424514 RSA 2012
Assessee PAN ADXPS3821M
Bench Pune
Appeal Number ITA 554/PUN/2012
Duration Of Justice 1 year(s) 4 month(s) 14 day(s)
Appellant ACIT Cen Cir 1 [1] Pune., Pune
Respondent Shri Bharat Keshavlal Shah,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-07-2013
Assessment Year 2007-2008
Appeal Filed On 16-03-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A PUNE BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO.521/PN/2012 (ASSESSMENT YEAR : 2007-08) SHRI BHARAT KESHAVLAL SHAH 27 SUJAY GARDEN 12 MUKUNDNAGAR PUNE 411 037 PAN : ADXPS3821M . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1 (1) PUNE. . RESPONDENT ITA NO.554/PN/2012 (ASSESSMENT YEAR : 2007-08) ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1 (1) PUNE . APPELLANT VS. SHRI BHARAT KESHAVLAL SHAH 27 SUJAY GARDEN 12 MUKUNDNAGAR PUNE 411 037 PAN : ADXPS3821M . RESPONDENT ASSESSEE BY : MR. MAHENDRA MEHTA DEPARTMENT BY : MS. M.S. VERMA DATE OF HEARING : 04-07-2013 DATE OF PRONOUNCEMENT : 30-07-2013 ORDER PER G. S. PANNU AM THE CAPTIONED CROSS-APPEALS EACH BY THE ASSESSEE AND THE REVENUE PERTAINING TO THE ASSESSMENT YEAR 2007-08 WERE HEA RD TOGETHER AND ARE BEING DISPOSED-OFF BY WAY OF A CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE AND BREVITY. THE CAPTIONED APPEALS ARE DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - I PUNE DATE D 15.09.2011 WHICH IN ITA NO.521/PN/2012 ITA NO.554/PN/2012 SHRI BHARAT KESHAVLAL SHAH A.Y. 2007-08 TURN HAS ARISEN FROM AN ASSESSMENT ORDER DATED 31. 12.2009 PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH S ECTION 153A OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) FOR THE ASSESSM ENT YEAR 2007-08. 2. FIRST WE SHALL TAKE-UP THE APPEAL OF THE ASSESS EE IN ITA NO.521/PN/2012 WHEREIN THE SOLITARY DISPUTE IS WITH REGARD TO AN ADDITION OF RS.6 03 589/- MADE ON ACCOUNT OF UNEXPLAINED/UNA CCOUNTED INVESTMENT IN CONSTRUCTION OF A BUNGALOW AT 27 SUJAY GARDEN 12 MUKUNDNAGAR PUNE. IT WAS A COMMON GROUND BETWEEN THE PARTIES THAT THE SA ID ISSUE STANDS ON SIMILAR FOOTING AS WAS CONSIDERED IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2002-03 VIDE ORDER IN ITA NO.516/PN/2012 OF EVEN DA TE. IN TERMS OF OUR DECISION IN ITA NO.516/PN/2012 OF EVEN DATE THE AF ORESAID GROUND IS PARTLY ALLOWED. 3. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 4. NOW WE MAY TAKE-UP THE CROSS-APPEAL OF THE REVE NUE IN ITA NO.554/PN/2012 WHEREIN THE GRIEVANCE OF THE REV ENUE IS AGAINST THE ACTION OF THE CIT(A) IN HOLDING THAT THE GAIN ON SALE OF AGRICULTURAL LAND WAS LIABLE TO BE TREATED AS A LONG TERM CAPITAL GAIN INSTEAD OF BUSINESS INCOME TREATED BY THE ASSESSING OFFICER. 5. IN BRIEF THE RELEVANT FACTS ARE THAT THE ASSESS EE WAS FOUND TO HAVE SOLD AGRICULTURAL LAND DURING THE YEAR UNDER CONSIDERATI ON ON 21.12.2006 FOR A TOTAL CONSIDERATION OF RS.3 44 00 000/-. THE ASSESSEE HAD PURCHASED THE LANDS IN AN EARLIER F.Y. 2000-01 FOR A CONSIDERATION OF RS.3 9 78 000/-. THE LONG TERM CAPITAL GAIN ON SUCH SALE OF LAND WAS TREATED AS EX EMPT AS ON THE GROUND THAT THE PROPERTY WAS AN AGRICULTURAL LAND NOT FALLING W ITHIN THE SCOPE OF SECTION 2(14) OF THE ACT. THE ASSESSING OFFICER HOWEVER HEL D THAT THE PROFIT DERIVED BY THE ASSESSEE FROM THE SALE OF AGRICULTURAL LAND WAS A TRANSACTION IN THE NATURE ITA NO.521/PN/2012 ITA NO.554/PN/2012 SHRI BHARAT KESHAVLAL SHAH A.Y. 2007-08 OF TRADE AND THEREFORE THE INCOME OF RS.3 04 22 000 /- WAS LIABLE TO BE TREATED AS INCOME FROM BUSINESS. 6. IN COMING TO THE AFORESAID CONCLUSION ASSESSING OFFICER NOTED THAT ASSESSEE WAS ENGAGED IN THE BUSINESS OF PROMOTERS A ND BUILDERS AND HE AND HIS FAMILY MEMBERS WERE PARTNERS IN FIRMS OR DIRECT OR IN COMPANIES WHO WERE ENGAGED IN THE BUSINESS OF PROMOTERS AND BUILDERS. THE ASSESSEE HAD DEVELOPED MANY PROJECTS BY HIMSELF ALSO IN HIS PROP RIETARY CONCERN. ACCORDING TO THE ASSESSING OFFICER THE INVESTMENT MADE TOWAR DS PURCHASE OF LAND WAS WITH AN INTENTION TO EARN PROFIT BY SELLING IT IN F UTURE OR BY DEVELOPING IT THROUGH HIS DEVELOPER FIRMS/COMPANIES. THE ASSESSING OFFICE R ALSO NOTICED THAT FROM THE PERIOD ASSESSEE PURCHASED THE LAND IN F.Y. 2000 -01 TO THE CURRENT ASSESSMENT YEAR ASSESSEE EARNED ONLY MEAGRE AGRICU LTURAL INCOMES AND THEREFORE THE UNDERLYING INTENTION WAS ONLY TO EAR N PROFITS BY SELLING THE LAND AT HIGHER RATES SUBSEQUENTLY. THE ASSESSING OFFICER ALSO RELIED ON THE PARAMETERS STATED IN CBDT CIRCULAR NO. 4/2007 DATED 15.06.2007 TO INFER THAT THE ASSESSEE WAS ENGAGED IN A BUSINESS ACTIVITY OF REAL ESTATE WHILE PURCHASING THE IMPUGNED AGRICULTURAL LANDS. THE ASS ESSING OFFICER ALSO RELIED UPON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF GOPAL KASAT VS. ITO JALGAON NO. 513 514/PN/2005 AND 50/P N/2006 DATED 22.08.2008 WHEREIN SIMILAR ACTIVITY UNDERTAKEN BY T HE ASSESSEE WAS HELD TO BE IN THE NATURE OF BUSINESS TRANSACTIONS. FOR ALL THE AFORESAID REASONS ASSESSING OFFICER CONSIDERED THE INCOME EARNED ON S ALE OF AGRICULTURAL LAND AS BUSINESS INCOME THUS REJECTING ASSESSEES CLAIM TH AT IT WAS A LONG TERM GAIN EXEMPT FROM TAX BEING OUTSIDE THE SCOPE OF SECTION 2(14) OF THE ACT BEING AGRICULTURAL LAND. 7. IN APPEAL BEFORE THE CIT(A) ASSESSEE MADE VARIE D SUBMISSIONS BOTH ON THE POINT OF LAW AND FACTS. THE ASSESSEE SUBMITT ED THAT HE PURCHASED THE SAID AGRICULTURAL LAND IN THE F.Y. 2000-01 AND THE SAME COULD HAVE BEEN ITA NO.521/PN/2012 ITA NO.554/PN/2012 SHRI BHARAT KESHAVLAL SHAH A.Y. 2007-08 PURCHASED ONLY IF THE ASSESSEE WAS AN AGRICULTURIST ; THAT HIS FATHER AND GRANDFATHER WERE HAVING AGRICULTURAL LANDS IN THE N ATIVE PLACE; THAT THE AGRICULTURAL LAND WAS PURCHASED FROM OWN FUNDS AND NO BORROWINGS WERE MADE; THAT ASSESSEE WAS DERIVING AGRICULTURAL INCOM E FROM THE SAID AGRICULTURAL LAND; THAT AFTER HOLDING THE LAND FOR ALMOST 7 YEARS IT WAS SOLD; THAT THE ENTIRE LAND WAS PURCHASED AND SOLD IN A SINGLE TRANCHE ON AS IS WHERE IS BASIS; THAT THERE WAS NO DEVELOPMENT ACTIVITY CARRI ED OUT BY CONSTRUCTION OF A BOUNDARY WALL OR LAYOUT IN SUB-PLOTS OR CONSTRUCTIO N OF INTERNAL ROADS ETC.; THAT IN CONTRAST WHEREVER LAND IS PURCHASED FOR BUSINESS OF PROMOTER/DEVELOPER THE SAME IS DEVELOPED RESIDENTIAL/COMMERCIAL UNITS ARE CONSTRUCTED AND THEN SOLD. IN THIS MANNER ASSESSEE POINTED OUT THAT AGR ICULTURAL LAND WAS ACQUIRED FOR THE PURPOSES OF INVESTMENT ONLY AND IT WAS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE ACT BEING AN AGRIC ULTURAL LAND BEYOND THE PRESCRIBED MUNICIPAL LIMITS. ASSESSEE ALSO BROUGHT TO THE NOTICE OF THE CIT(A) THAT THE LAND IN QUESTION WAS AT A DISTANCE FROM NO RMAL INFRASTRUCTURE FACILITIES AND THAT IT WAS IN ANY CASE NOT SUITABLE FOR DEVE LOPMENT. IT WAS ALSO ASSERTED THAT BEING AN AGRICULTURIST FROM BIRTH ASSESSEE AC QUIRED THE AGRICULTURAL LAND AROUND PUNE FOR ITS PRIDE OF POSSESSION SINCE NO T ALL PERSONS CAN BUY AGRICULTURAL LANDS. ASSESSEE ALSO EXPLAINED THAT TH E CBDT CIRCULAR NO. 4/2007 (SUPRA) RELIED UPON BY THE ASSESSING OFFICER WAS AL SO NOT RELEVANT AS IT WAS IN RESPECT OF SHARE TRANSACTIONS. THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF GOPAL KASAT (SUPRA) RELIED UPON BY T HE ASSESSING OFFICER WAS ALSO SOUGHT TO BE DISTINGUISHED ON FACTS. 8. THE CIT(A) HAS FOUND FORCE IN THE PLEAS OF THE A SSESSEE AND NOTED THAT HAVING REGARD TO THE EXPLANATIONS RENDERED BY THE A SSESSEE ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN TREATING THE I NCOME ON SALE OF AGRICULTURAL LAND AS BUSINESS INCOME. THE CIT(A) NOTED THAT THER E WAS NO MATERIAL ON RECORD TO SHOW THAT THE LAND PURCHASED WAS NOT AN A GRICULTURAL LAND. AS PER THE CIT(A) THOUGH THE ASSESSEE WAS OTHERWISE INVOLV ED IN THE BUSINESS ITA NO.521/PN/2012 ITA NO.554/PN/2012 SHRI BHARAT KESHAVLAL SHAH A.Y. 2007-08 ACTIVITY OF REAL ESTATE YET IT CANNOT BY ITSELF BE CONCLUSIVE THAT THE IMPUGNED SALE OF AGRICULTURAL LAND WAS A BUSINESS ACTIVITY. THE CIT(A) FURTHER NOTICED THAT THERE WAS NO MATERIAL FOUND DURING THE SEARCH ON THE ASPECT WHICH REFLECTED THAT THE LAND WAS PURCHASED FOR THE PURPO SES OF BUSINESS. THE CIT(A) ALSO NOTICED THAT THE LAND WAS PUT TO AGRICU LTURAL OPERATIONS BY THE ASSESSEE DURING THE PERIOD AND IT WAS HELD BY HIM A ND IT WAS SOLD WITHOUT UNDERTAKING ANY DEVELOPMENT OR OTHER ACTIVITIES WHI CH IS GENERALLY UNDERTAKEN BY A DEVELOPER TO FETCH HIGHER PRICES FOR EXAMPLE LAYING OF INTERNAL ROADS SUB-PLOTTING BOUNDARY WALL ETC.. THE CIT(A) FURTHE R NOTICED THAT THERE WAS NO MATERIAL TO SHOW THAT THE USE OF LAND IN QUESTION W AS CHANGED FROM AGRICULTURAL TO RESIDENTIAL/COMMERCIAL DURING THE PERIOD IT WAS HELD BY THE ASSESSEE. THE CIT(A) ALSO OBSERVED THAT IN THE ABSENCE OF CHANGE OF LAND USE DEVELOPMENT OF LAND WAS NOT POSSIBLE AND THEREFORE THE SALE COU LD NOT BE CONSIDERED AS A BUSINESS TRANSACTION UNLESS IT COULD BE ESTABLISHED THAT ASSESSEE WAS IN TRADING OF AGRICULTURAL LANDS. ON THIS ASPECT THE CIT(A) WENT ON TO HOLD AS UNDER :- THEREFORE IN MY OPINION THE DEVELOPMENT WAS EVEN NOT POSSIBLE LEGALLY TO BE CARRIED OUT ON THIS LAND. IF THE DEVE LOPMENT WAS NOT POSSIBLE THE SALE CANNOT BE CONSIDERED TO BE FOR THE PURPOSE OF BUSINESS UNLESS IT IS ESTABLISHED THAT THE APPELLANT IS TRADING IN AGRICU LTURAL LANDS. ON THIS ASPECT ALSO I DO NOT FIND ANY MATERIAL ON RECORD. THE APPE LLANT HAS NOT TRADED REGULARLY AS PER THE MATERIAL AVAILABLE. THE AGRICU LTURAL LANDS WERE PURCHASED IN F.Y. 2000-01 AND SOLD IN F.Y. 2006-07. THERE IS NO REGULARITY OF THIS ACTIVITY WHICH COULD CONSTITUTE THIS ACTIVITY AS THAT OF THE NATURE OF BUSINESS. IN NONE OF THE YEARS UNDER APPEAL ANY OTHER INSTANCE OF SALE O F AGRICULTURAL LAND EXISTS. THE AUTHORISED REPRESENTATIVE CONTENDED DURING APPE AL ON BEING QUERIED ON THIS ISSUE THAT NO SUCH TRANSACTION WAS CARRIED OUT IN LAST MANY YEARS OTHER THAN THE ONE IN QUESTION. IT CAN ALSO NOT BE INFERR ED FROM THE MATERIALS ON RECORD THAT THE APPELLANT HAD REASONS TO ANTICIPATE THAT THE AFORESAID LAND WOULD FETCH SO MUCH MONEY AFTER 5-6 YEARS OF PURCHA SE AND THEREFORE IT CANNOT BE LOGICALLY HELD THAT THE PURCHASE WAS NOT MADE FOR CARRYING OUT AGRICULTURAL ACTIVITY BUT TO EARN A GOOD PROFIT ON ITS SALE AS AN ADVENTURE OF BUSINESS. THE ASSESSING OFFICER HAS ALSO NOT BROUGH T ON RECORD THAT THE AFORESAID LAND WAS APPEARING IN THE BOOKS AS STOCK IN TRADE OR THERE IS ANY MATERIAL WHICH COULD ESTABLISH THAT THE PURCHASE WA S INTENDED TO EARN QUICK PROFIT ON SALE. ALL THE DISCUSSIONS AND INFERENCES DRAWN BY THE ASSESSING OFFICER ARE THEREFORE FOUND TO BE BASED ON PRESUMPT IONS WHICH HAVE NOT BEEN ESTABLISHED WITH EVIDENCES AND THEREFORE CANNOT BE ALLOWED TO BE SUSTAINED. ITA NO.521/PN/2012 ITA NO.554/PN/2012 SHRI BHARAT KESHAVLAL SHAH A.Y. 2007-08 9. ON THE BASIS OF THE AFORESAID THE CIT(A) CONCLU DED THAT THE ASSESSING OFFICER WAS WRONG IN HOLDING THAT THE INCOME FROM S ALE OF AGRICULTURAL LAND WAS TO BE ASSESSED AS BUSINESS INCOME. AGAINST THE AFOR ESAID DECISION OF THE CIT(A) REVENUE IS IN APPEAL BEFORE US. 10. BEFORE US THE LEARNED CIT(DR) APPEARING FOR TH E REVENUE HAS DEFENDED THE ORDER OF THE ASSESSING OFFICER BY POIN TING OUT THAT ASSESSEE WAS ADMITTEDLY ENGAGED IN THE BUSINESS OF DEVELOPER/REA L ESTATE AND THE PRESENT ACTIVITY OF PURCHASE AND SALE OF AGRICULTURAL LAND IS ALSO TO BE UNDERSTOOD AS A BUSINESS TRANSACTION. THE LEARNED CIT(DR) REFERRED TO THE DISCUSSION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND R EASONING ADVANCED THEREIN IN ORDER TO TREAT THE TRANSACTION AS AN ADV ENTURE IN THE NATURE OF TRADE. THE SAID REASONING HAS ALREADY BEEN NOTED BY US IN PARA 6 ABOVE AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. APART FROM THE AFORESAID THE LEARNED CIT(DR) REFERRED TO THE PAPER BOOK FILED BY THE ASS ESSEE WHEREIN THE RETURN OF INCOMES FOR ASSESSMENT YEARS 2004-05 AND 2005-06 HAVE BEEN PLACED ALONG WITH RESPECTIVE BALANCE-SHEETS. THE LEARNED C IT(DR) POINTED OUT THAT AGRICULTURAL LANDS HAVE BEEN SHOWN IN THE BALANCE-S HEET AND THEREFORE SHE SUBMITTED THAT THE ASSESSEE HAS TREATED THE SAME AS BUSINESS ASSETS. 11. THE LEARNED COUNSEL FOR THE RESPONDENT-ASSESSEE HOWEVER POINTED OUT THAT THE SAID AGRICULTURAL LANDS HAVE BEEN DEPI CTED IN THE INDIVIDUAL BALANCE-SHEET UNDER THE HEAD IMMOVABLE PROPERTIES OF THE ASSESSEE INDIVIDUAL AND NOT AS CURRENT ASSETS WHICH CONST ITUTE BUSINESS ASSETS. IT WAS POINTED OUT THAT CURRENT ASSETS CONTAIN PROPERTIE S WHICH ARE RELATED TO THE BUSINESS OF REAL ESTATE/PROMOTERS AND CONSTITUTED B USINESS ASSETS WHEREAS THE IMMOVABLE PROPERTIES DO NOT CONTAIN ANY BUSIN ESS ASSETS. IN ANY CASE LEARNED COUNSEL POINTED OUT THAT THE AFORESAID OBSE RVATIONS OF THE CIT(DR) ARE NOT BROUGHT OUT BY THE ASSESSING OFFICER AND THEREF ORE IT IS A PLEA WHICH DOES ITA NO.521/PN/2012 ITA NO.554/PN/2012 SHRI BHARAT KESHAVLAL SHAH A.Y. 2007-08 NOT ARISE OUT OF THE ORDERS OF THE AUTHORITIES BELO W. FURTHERMORE IT WAS POINTED OUT THAT HAVING REGARD TO THE FACTUAL SITUATION TH E PLEA OF THE LEARNED CIT(DR) IS ALSO OTHERWISE UNTENABLE. APART FROM THE AFORESA ID THE LEARNED COUNSEL POINTED OUT THAT IN SOMEWHAT SIMILAR CIRCUMSTANCES INCOME ON SALE OF AGRICULTURAL LANDS WAS HELD ASSESSABLE AS CAPITAL G AINS AND NOT BUSINESS INCOME BY THE PUNE BENCH OF THE TRIBUNAL IN THE CAS E OF ALPANA SURENDRA SANCHETI VIDE ITA NO.1081 & OTHERS/PN/2011 DATED 22 .03.2013 A COPY OF ORDER HAS BEEN PLACED ON RECORD. ACCORDING TO THE L EARNED COUNSEL THE CIT(A) MADE NO MISTAKE IN UPHOLDING THE PLEA OF THE ASSESS EE AND HE RELIED UPON THE ORDER OF THE CIT(A) IN SUPPORT OF THE CASE OF THE A SSESSEE. 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE PERTINENT FACTS IN THIS CASE ARE THAT IN THE YEAR 2000-01 ASSESSEE PURCHASED CERTAIN AGRICULTURAL LAND WHICH HAS BEEN SOLD DURING THE YE AR UNDER CONSIDERATION. IN THE INTERREGNUM ASSESSEE DECLARED AGRICULTURAL INC OME FROM THE SAID LAND DURING THE ASSESSMENT YEARS 2002-03 2003-04 AND 20 04-05. OSTENSIBLY THERE IS NO DISPUTE TO THE FACT THAT THE LAND IN QU ESTION WAS AN AGRICULTURAL LAND. IT IS ALSO CLEAR FROM THE ORDERS OF THE AUTHORITIES BELOW THAT AT NO STAGE ASSESSEE UNDERTOOK ANY DEVELOPMENT ACTIVITY ON SUCH LAND AKIN TO A DEVELOPER FOR INSTANCE THERE IS NO CONSTRUCTION O F COMPOUND WALL LAYING OF INTERNAL ROADS SUB-PLOTTING ETC.. THE LAND HAS BE EN SOLD BY THE ASSESSEE WITHOUT TAKING ANY STEPS TO FURTHER DEVELOP IT SO A S TO ADD VALUE TO IT IN ORDER TO MAXIMIZE THE PROFITS ON SALE. THE CIT(A) HAS ALS O BROUGHT OUT THAT IN THE STATE OF MAHARASHTRA ONLY AN AGRICULTURIST CAN OWN AGRICULTURAL LAND WHICH INDICATES THAT THE CLAIM OF THE ASSESSEE THAT HE WA S AN AGRICULTURIST WAS BONA- FIDE. THE CIT(A) HAS ALSO COME TO A FINDING THAT TH ERE WAS NO MATERIAL TO SHOW THAT LAND USE WAS SOUGHT TO BE CHANGED FROM AGRICUL TURAL TO NON-AGRICULTURAL LAND. IT IS ALSO RELEVANT TO NOTE THAT ASSESSEE HEL D THE LAND FOR ALMOST 7 YEARS BEFORE SELLING IT. ALL THE AFORESAID FEATURES ARE N OT IN DISPUTE. ITA NO.521/PN/2012 ITA NO.554/PN/2012 SHRI BHARAT KESHAVLAL SHAH A.Y. 2007-08 13. NO DOUBT ASSESSEE IS OTHERWISE ENGAGED IN THE BUSINESS OF PROMOTERS/DEVELOPERS OF REAL ESTATE. NATURALLY IN THE FIRST IMPRESSION IT MIGHT SEEM THAT THE PRESENT TRANSACTION OF THE SALE OF AG RICULTURAL WAS UNDERTAKEN BY THE ASSESSEE IN THE COURSE OF REAL ESTATE BUSINESS. SO HOWEVER HAVING REGARD TO THE AFORESAID FEATURES SUCH FIRST IMPRES SION CANNOT BE SUPPORTED BY FACTS. OSTENSIBLY IF THE ASSESSEE WAS TREATING THE SAID AGRICULTURAL LAND AS A PART OF HIS ACTIVITY OF PROMOTER/DEVELOPER OF REAL ESTATE CERTAIN STEPS OR ACTIVITIES WOULD HAVE BEEN UNDERTAKEN BY HIM WHICH WOULD REFLECT SUCH AN INTENTION. FACTUALLY SPEAKING THERE IS NO SUCH ACT IVITY UNDERTAKEN BY THE ASSESSEE AND WE FIND THAT THE CIT(A) HAS CORRECTLY ASSERTED THE SAME. IN-FACT THERE IS NO SUCH ALLEGATION EVEN IN THE ASSESSMENT ORDER. THEREFORE ON THIS FACT WE FIND NO ERROR ON THE PART OF THE CIT(A) TO CONCLUDE THAT IN THE ABSENCE OF ANY DEVELOPMENT UNDERTAKEN OR RATHER IN THE ABSE NCE OF ANY LEGALLY PERMISSIBLE DEVELOPMENT OF THE IMPUGNED LAND THE T RANSACTION OF SALE OF LAND CANNOT BE CONSIDERED AS A BUSINESS TRANSACTION. AT THIS POINT IT WOULD ALSO BE APPROPRIATE TO NOTICE THAT THE LANDS HAVE BEEN HELD BY THE ASSESSEE FOR A FAIRLY LONG PERIOD OF TIME NAMELY 7 YEARS (APPROX) AND IN THE INTERVENING PERIOD ASSESSEE HAD ALSO DECLARED AGRICULTURAL INCOMES. WE ARE CONSCIOUS OF THE FACT THAT INTENTION OF THE ASSESSEE IS AN IMPORTANT INGR EDIENT TO EXAMINE AS TO WHETHER THE TRANSACTION IS IN THE NATURE OF BUSINES S OR NOT. IN THE PRESENT CASE THERE HAS BEEN NO ACTION ON THE PART OF THE ASSESSE E TO DEVELOP THE LAND FOR A GOOD 7 YEARS AND IN OUR VIEW THE HIGHER SALE VALUE REALIZED BY THE ASSESSEE IS ON ACCOUNT OF APPRECIATION IN LAND VALUES DUE TO EFFLUX OF TIME. THEREFORE CASE OF THE ASSESSING OFFICER THAT THE LANDS WERE P URCHASED TO EARN QUICK PROFIT CANNOT BE JUSTIFIED HAVING REGARD TO THE PER IOD OF HOLDING AND ALSO THE MANNER IN WHICH ASSESSEE HAS HELD THE AGRICULTURAL LANDS PRIOR TO ITS SALE. 14. WE MAY ALSO REFER TO THE DECISION OF THE PUNE B ENCH OF THE TRIBUNAL IN THE CASE OF GOPAL KASAT (SUPRA) RELIED UPON BY THE ASSESSING OFFICER TO SAY ITA NO.521/PN/2012 ITA NO.554/PN/2012 SHRI BHARAT KESHAVLAL SHAH A.Y. 2007-08 THAT THE INCOME BY SELLING OF AGRICULTURAL LAND WAS TO BE ASSESSED AS A BUSINESS TRANSACTION. IN THE CASE OF GOPAL KASAT (S UPRA) ASSESSEE PURCHASED CERTAIN LANDS WHICH WERE SUBJECT-MATTER OF ACQUISIT ION PROCEEDINGS BY THE GOVERNMENT. THE TRIBUNAL IN THIS BACKGROUND NOTED THAT THE ASSESSEE WAS AWARE AT THE TIME OF PURCHASE THAT THE LAND COULD NOT BE HELD AS AN INVESTMENT FOR A LONG PERIOD AS THE SAME WAS UNDER ACQUISITION PROCEEDINGS. THE AFORESAID FACTOR PREVAILED WITH THE TRIBUNAL TO HOLD THAT SURPLUS ON SALE OF SUCH LAND WAS TO BE TREATED AS BUSINESS INCOME AN D NOT AS CAPITAL GAINS. IN THE PRESENT CASE THE FACTS STAND ON AN ENTIRELY DI FFERENT FOOTING INASMUCH AS THERE IS NO MATERIAL TO SHOW THAT AT THE TIME OF PU RCHASE ASSESSEE HAD ANY INTENTION OF DOING ANY BUSINESS OF DEALING IN AGRIC ULTURAL LANDS. IN-FACT IN OUR VIEW THE CIT(A) RIGHTLY RELIED UPON THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BOMBAY OILSEEDS & OIL EXCHANGE LTD. 202 ITR 198 (BOM.) TO HOLD THAT IT WAS FOR THE REVENUE TO P ROVE THAT THE LAND IN QUESTION FORMED PART OF THE BUSINESS ASSET AND IN THE ABSENCE OF ANY SUCH EVIDENCE THE PRESUMPTION IS THAT THE LAND WAS HELD BY THE ASSESSEE MERELY AS AN INVESTOR AND INCOME FROM SUCH TRANSACTION WAS NOT TO BE TREATED AS CAPITAL GAIN. 15. HAVING REGARD TO THE AFORESAID DISCUSSION AND T HE FACTUAL APPRECIATION AS BROUGHT BY THE CIT(A) WE FIND NO REASONS TO INT ERFERE WITH THE IMPUGNED ORDER WHICH WE HEREBY AFFIRM. ACCORDINGLY WE UPHO LD THE ORDER OF THE CIT(A). 16. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. 17. RESULTANTLY WHEREAS THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED THAT OF THE REVENUE IS DISMISSED. ITA NO.521/PN/2012 ITA NO.554/PN/2012 SHRI BHARAT KESHAVLAL SHAH A.Y. 2007-08 ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JULY 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 30 TH JULY 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A) I PUNE; 4) THE CIT-I PUNE; 5) THE DR A BENCH I.T.A.T. PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T. PUNE