VARDAN BUILDCON Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) ALL these three appeals arise out of the common order dt. 27th Aug., 2010 passed by the Tribunal in three appeals which were preferred by these appellants/appeals. The three appellants are the partnership firms which are sister concerns. A partnership was entered into in respect of all three concerns, on the same date, with one partner as common partner. It is also an admitted case that as per the partnership deed, all these three firms were to do business of real estate developers, building construction and sale and purchase of property or any other business which the partners mutually decide from time to time. For the asst. yr. 2006-07, the partnership firms in their returns showed the business loss, and at the same time income from agriculture on the purchase and sale of the agricultural land. The AO took a view that agricultural income, as shown by appellants, was in fact, business income, and accordingly, taxed the same as business income at the hands of the assessees. The assessee preferred an appeal before the CIT (A) which was dismissed upholding the findings of the AO. Further, appeal to the Tribunal has met the same fate as Tribunal vide impugned order has upheld the findings of the CIT(A) as well as AO thereby returning the finding and holding that income in question from the purchase and sale of the land was business income as the main business of these firms was that of real estate as well as sale and purchase of property.

(2.) LEARNED counsel for the appellant, at the outset submitted that it was a mistake on the part of the assessee to show the aforesaid income as agricultural income. It is thus conceded that income from the sale of the land was not agricultural income. It is however, sought to argue that the purchase of land in question was an investment by the assessee and that the sale of the land as capital profit was arrived at and therefore it was not assessable to tax. It is further argued that though the partnership deed was entered into, no business was at all commenced till date, and therefore, the aforesaid transaction entered into by the assessee could not be treated as business income. It is further submitted that the findings of the authorities below are totally perverse. At the end, another submission was that though the Tribunal took note of various arguments advanced by the appellant in para 6 of the impugned order, it has not dealt with those arguments. After giving thought to the considerations to the aforesaid submission and going through the orders of the authorities below, we do not find any justice or merit in any of the aforesaid contention.

(3.) THEREAFTER the CIT(A) highlighted these facts which emerged from record :