| The Tax Publishers2019 TaxPub(DT) 8455 (Pune-Trib) INCOME TAX ACT, 1961
Section 14
As per revenue records, rice was grown on concerned land though, assessee had also admitted the fact that he was engaged into real estate business on commission basis, however, this did not preclude assessee to puchase land and held it as capital asset. Revenue has not furnished any document to indicate that land was held by assessee as stock-in-trade or before sale of land, assessee had developed the same for commercial purpose. Provisions of the Act has granted liberty to assessee to revise returns with the object of removing any mistakes/errors in computation of income or head of income. If assessee in original return of income had inadvertently mentioned the head of income as business income, it did not mean that it became sacrosanct and assessee could not change head of income in revised return. Taking into consideration, entirety of facts, transaction of sale of agricultural land by assessee was not adventure in the nature of trade and gain arising from sale of land was assessable under the head 'capital gains'.
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Head of income - Business income or Capital gains - Profit on sale of land originally declared as business income - Subsequent filing of revised return along with evidence to prove intention to retain concerned land as capital asset for agricultural purposes
Assessee engaged in multiple business activities, viz., dairy business, supply of building material and real estate business declared profit on sale of agricultural land as business income. Later on, assessee revised return of income filed by him and declared above said profit as 'capital gain'. AO did not accept revised return of income and holding the same as non-est, taxed income from sale of land as 'business income' of assessee. Held: Assessee in order to substantiate his intention to retain concerned land for agricultural purposes and 'capital asset' placed on record various documents viz. revenue records, i.e., 7/12 extracts, agreement to sell dated, registered sale deed in name of assessee and registered sale deed executed by assessee in the name of purchaser. A mutation entry in revenue records in favour of assessee 'qua' land was entered after execution of registered sale deed in favour of assessee. The 7/12 extracts available on record showed that on part of land some cultivation activities were carried out. As per revenue records, rice was grown on concerned land though, assessee had also admitted the fact that he was engaged into real estate business on commission basis, however, this did not preclude assessee to puchase land and held it as capital asset. Revenue has not furnished any document to indicate that land was held by assessee as stock-in-trade or before sale of land, assessee had developed the same for commercial purpose. Provisions of the Act has granted liberty to assessee to revise returns with the object of removing any mistakes/errors in computation of income or head of income. If assessee in original return of income had inadvertently mentioned the head of income as business income, it did not mean that it became sacrosanct and assessee could not change head of income in revised return. Taking into consideration, entirety of facts, transaction of sale of agricultural land by assessee was not adventure in the nature of trade and gain arising from sale of land was assessable under the head 'capital gains'.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
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