Case Law Details
Principal CIT Vs Heenaben Bhadresh Mehta (Gujarat High Court)
on plain reading of Section 2(14) of the Act, if the “agriculture land” as mentioned in Section 2(14)(iii) is sold, the assessee shall be entitled to claim exemption on profit earned on sale of agricultural land as per Section 2(14) read with Section 45 of the Act, unless it is established and proved that the transaction carried out was “adventure in the nature of trade” and the profit thus required to be taxed as business income. On appreciation of evidence, the learned Tribunal has specifically observed and held that the transaction carried out by the assessee was not “adventure in the nature of trade” and therefore, profit earned was not required to be taxed as business income. The aforesaid is the finding recorded by the learned Tribunal on appreciation of evidence.
As observed hereinabove, the land was sold as an agricultural land and in fact, what was sold was agriculture land. What was the intention of the purchaser cannot be the determinative factor to treat the profit earned by the assessee on sale of agriculture land as business income. Similarly, merely because for whatever reason, the assessee has earned sufficient huge amount of profit also cannot be a ground to treat the profit earned by the assessee on sale of agriculture land as business income.
Under the circumstances and on the facts and circumstances of the case, the learned Tribunal has not committed any error in directing the Assessing Officer to treat the profit of Rs.68,18,800/- earned by the assessee on the sale of agriculture land as exempt under Section 2(14) of he Income Tax Act.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
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