The Tribunal held that the lands were agricultural lands at the time of transfer, and the lands had been put to agricultural operations. Further, that the purchaser of the lands had used the lands for non-agricultural purposes had no bearing in determining the nature of assets sold by the assessee on the date of sale. The assessee had been disclosing agricultural income, though meagre, and this was accepted by the Department. Thus, it could not be said that there were no agricultural activities on the subject lands and merely because the assessee-company made a huge amount of profits could not be ground to treat the profits arising on the sale of agricultural land as “business income.” The very object of holding the lands had changed, and this was demonstrated by the assessee company in the form of treatment given in the books of account by conversion of the lands held as stock-in-trade into investments. The material on record would conclusively prove that the lands were agricultural lands held as investments. Therefore, the profits arising from the sale of land could not be brought to tax as a business adventure in the nature of trade. (AY. 2013-14)
ACIT v. Renaissance Cultivation LLP (2022) 96 ITR 665 / 219 TTJ 327 /141 taxmann.com 252 (Pune)(Trib)
S. 153A : Assessment-Search or requisition-Assessment of third person-Agricultural land at time of transfer and put to agricultural operations-Purchaser of land used for non-agricultural purpose not relevant in determining nature of aassets sold by aaassessee on date of sale-Sale consideration cannot be assessed as business income-Order of CIT(A) is affirmed. [S. 10(38), 28(i), 45]