Rajpura Estate Development Limited v. Commissioner of Income-tax, Patiala and another
[Citation -2020-LL-0205-69]
| Citation | 2020-LL-0205-69 |
|---|---|
| Appellant Name | Rajpura Estate Development Limited |
| Respondent Name | Commissioner of Income-tax, Patiala and another |
| Court | HIGH COURT OF PUNJAB & HARYANA |
| Relevant Act | Income-tax |
| Date of Order | 05/02/2020 |
| Assessment Year | 1990-91 |
| Judgment | View Judgment |
| Keyword Tags | sale of agricultural land • current asset • profit and gains of business • capital gain • stock-in-trade |
| Bot Summary: | AJAY TEWARI, J. 1 This appeal has been filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chandigarh passed in ITA No.106/Chandi/1995 for the assessment year 1990-91, treating the sale of agricultural land by the appellant as 'profit from business' rather than 'capital gain'. 2 The appellant is called 'M/s Rajpura Estate Development Limited' and one of the main business of the company is purchase, development and sale of land. 3 Learned counsel for the appellant has argued that authorities below had erred in brushing aside the facts that right from the time of its purchase, the appellant had reflected the land as current asset and that it was not a case where the land was sold after a few months but a case where the appellant held on to the land for a good number of years and in these circumstances, the Revenue should have accepted tax on the basis of 'capital gain' rathen than from 'profit from business'. The Tribunal noticed that one of the main business of the appellant was to purchase, develop and sell land. It further noticed that in FY 1989-90 profits from the business as per the appellant was approximately 35,000/- and came to the conclusion that in the present case, the gain had to be taxed as 'profit from business'. 4 The argument that it was reflected as a current asset and for many years it was accepted by the Revenue would not cut much ice for a simple reason that the Revenue would look it at only once it is sold and as long as it was in the ownership of the appellant, the Revenue would not be overly concerned about the manner in which it was classified. 5 The bare fact that property was held by the appellant for 7-8 years also would not lead to the conclusion that it was purchased as current asset and not as stock-in-trade. |