M/S Rajpura Estate Development Limited v. Commissioner Of Income Tax, Patiala And Another

ITA No.12 of 2002{1} ��� IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH **** ITA No.12 of 2002Date of Decision: 05.02.2020 M/s Rajpura Estate Development Limited Versus Appellant Commissioner of Income Tax, Patiala and another Respondents CORAM: HON'BLE MR. JUSTICE AJAY TEWARIHON'BLE MR. JUSTICE AVNEESH JHINGANHON'BLE MR. JUSTICE AVNEESH JHINGAN Present:Mr. Alok Mittal, Advocatefor the appellant.for the appellant. Mr. Jitin Kohli, Junior Standing Counsel for the Revenue. AJAY TEWARI, J. (Oral) **** [1]This appeal has been filed under Section 260A of theIncome Tax Act, 1961 against the order of the Income Tax AppellateTribunal, Chandigarh passed in ITA No.106/Chandi/1995 for theassessment year 1990-91, treating the sale of agricultural land bythe appellant as 'profit from business' rather than 'capital gain'. [2]The appellant is called 'M/s Rajpura Estate DevelopmentLimited' and one of the main business of the company is purchase,development and sale of land. It had purchased a piece ofagricultural land in the financial year [for short 'FY'] 1982-83 and hadsold it after 7-8 years in FY 1989-90. It gained net amount of�8,21,000/- odd which he had offered to tax on the basis that it was ITA No.12 of 2002 'capital gain'. The authorities below held that this explanation cannotbe accepted and treated it as 'profit from business', hence thepresent appeal. [3]Learned counsel for the appellant has argued thatauthorities below had erred in brushing aside the facts that right fromthe time of its purchase, the appellant had reflected the land ascurrent asset and that it was not a case where the land was soldafter a few months but a case where the appellant held on to theland for a good number of years (7-8 years) and in thesecircumstances, the Revenue should have accepted tax on the basisof 'capital gain' rathen than from 'profit from business'. The Tribunalnoticed that one of the main business of the appellant was topurchase, develop and sell land. It further noticed that in FY 1989-90profits from the business as per the appellant was approximately�35,000/- and came to the conclusion that in the present case, thegain had to be taxed as 'profit from business'. [4]The argument that it was reflected as a current assetand for many years it was accepted by the Revenue would not cutmuch ice for a simple reason that the Revenue would look it at onlyonce it is sold and as long as it was in the ownership of theappellant, the Revenue would not be overly concerned about themanner in which it was classified. [5]The bare fact that property was held by the appellant for7-8 years also would not lead to the conclusion that it waspurchased as current asset and not as stock-in-trade. ITA No.12 of 2002 [6]The questions claimed do not arise, consequently, the appeal is dismissed. [7]Since the appeal is dismissed, the pending application, if any, stands disposed of. JUDGE JUDGE February 05, 2020���������������������������������������������������������������������������������