C/TAXAP/672/2018 JUDGMENT

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/TAX APPEAL NO. 672 of 2018

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE M.R. SHAH

Sd/-

and

HONOURABLE MR.JUSTICE A.Y. KOGJE

Sd/-

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1 Whether Reporters of Local Papers may be allowed to

see the judgment ?

No

2 To be referred to the Reporter or not ?

No

3 Whether their Lordships wish to see the fair copy of the

judgment ?

No

4 Whether this case involves a substantial question of law

as to the interpretation of the Constitution of India or any

order made thereunder ?

No

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PRINCIPAL COMMISSIONER OF INCOME TAX RAJKOT 1

Versus

HEENABEN BHADRESH MEHTA

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Appearance:

MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1

for the RESPONDENT(s) No. 1

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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH

and

HONOURABLE MR.JUSTICE A.Y. KOGJE

Date : 26/06/2018

ORAL JUDGMENT

(PER : HONOURABLE MR.JUSTICE M.R. SHAH)

1.

Feeling aggrieved and dissatisfied with the

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C/TAXAP/672/2018 JUDGMENT

impugned judgment and order dated 06.12.2017 passed by

the learned Income Tax Appellate Tribunal, Rajkot Bench,

Rajkot in ITA No.259/Rjt/2014 for Assessment Year 2009-

10, by which the learned Tribunal has allowed the appeal

preferred by the assessee and has directed 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 by holding that

the proceeds from sale of land is to be treated as income

from capital gain, the Revenue has preferred the present

Tax Appeal with the following proposed questions of law:-

“Whether

the

Appellate

Tribunal

has

substantially erred in law in holding that the

proceeds from sale of land is to be treated as

income from capital gain?”

2.

Facts leading to the present appeal in nutshell

are as under:-

2.1

The assessee filed her return of income for

Assessment Year 2009-10 showing total income at

Rs.1,53,440/-; that during the course of assessment

proceeings, the Assessing Officer notice that the

assessee has shown profit of Rs.68,18,800/-, claiming to

be from sale of agriculture land; that the same profit of

Rs.68,18,800/- was claimed as exempt from tax on the

ground that the land is not capital asset within the

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C/TAXAP/672/2018 JUDGMENT

meaning of Section 2(14) of the Income Tax Act and as

such, gain is not liable to tax under Section 45 of the

Act; that the said land was purchased by the assessee’s

father on 28.03.2008 for Rs.54,000/- and the same was

gifted to the assessee by her father on 02.09.2008, where

stamp duty of Rs.59,100/- was paid taking the market

value of the land at Rs.12,00,000/-; that the said land

was then sold by the assessee to M/s.SPG Infrastructure

Ltd., Mumbai for Rs.70,00,000/- and that the Assessing

Officer rejected the claim of the assessee of exempt

profit mainly on the ground that the land in question was

sold to an industrial unit and had potential to be used

for industrial purpose and therefore, the same was held

as business profit and the Assessing Officer made

addition of Rs.68,18,800/- and assessed the income at

Rs.69,72,237/-.

2.2

Feeling aggrieved and dissatisfied with the

above, the assessee preferred appeal before the learned

CIT (Appeals). The learned CIT (Appeals) dismissed the

said ap