Case Law Details
Sunil Bansal Vs ACIT (Rajasthan High Court)
There is no dispute that there are 16 transactions of purchase of the lands during the financial year relevant to the assessment year under consideration and equal number of transactions of sale by the assessee. On careful analysis of these details, it could be noted that some of the lands purchased during the year were also sold during the same year and even within a period of less than one month. It is evident from these details that the land purchased during the year bearing khasra No. 424/5 on 31/5/2007 was sold on 30/6/2007. Therefore, the said sale was within a period of 13 days from the date of purchase. Similarly 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 which cannot be on the face of it regarded as investments made by the assessee in agricultural lands. The intention of the assessee for purchase of the land is also not in dispute that it was for resale and within a short period of time though the sale is only to the companies of which 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. Hence, properties sold were not excluded from the meaning of capital asset, as they were not agricultural land as defined by section 2(14).
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
1. This is an assessee’s appeal under Section 260A of the Income Tax Act, 1961 contends that the Income Tax Appellate Tribunal (ITAT) has fallen into error; in its impugned order. It proposes a question of law i.e. whether the properties sold were to be excluded from the meaning of capital asset as they were agricultural land as defined by Section 2(14) of the Act of 1961.
2. The relevant facts are that the assessee reported, (for the assessment year 2008-2009) certain sale transactions. His return claimed that the transaction in purchase and sale of agricultural land could not be included in taxable income in view of Section 2(14)(iii) of the Act of 1961; in support of his contention the assessee relied upon a certificate issued by the concerned (2 of 6) [ITA-31/2019] Revenue Officer i.e. the Tehsildar to the effect that the land was situated 8 kilometers from any city municipality limits. The AO however, rejected the contention after considering the nature of the transactions. The asessee had contended that the lands initially purchased by him were infact registered and were intended to be maintained by him in their original character as agriculture lands and were in that form transferred to others who later got them converted into purposes other than agriculture, for example toward development etc. It was thus contended that the essential characteristic of the land was agricultural and thus, excluded from the ambit of the Act by virtue of Section 2(14). These contentions however, were negatived by the AO.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
