SYNTHITE INDUSTRIAL LTD. Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) These appeals are filed by the assessee against the orders passed by the Income Tax Appellate Tribunal in ITA Nos. 270 of 2014, 304 of 2014, 305 of 2014 and 192 of 2015, concerning the Assessment Years 2007-08, 2008-09, 2009-10 and 2010-11.

(2.) Since the facts and the questions of law are common, these cases were heard together and are disposed of by this common judgment.

(3.) The assessee is a company, engaged in the business of manufacture and sale of oleoresins and spices oil. On 29.03.2005, the assessee purchased 512 cents of agricultural land at Kadayirippu in Aikkaranadu North Village which is a Panchayat and is beyond eight kilometres radius of the nearby Municipality. The land was purchased for expansion of the assessee's factory. However, local people objected to the expansion of the factory and therefore, the assessee dropped its proposal for expansion and decided to convert the land into residential plots with an intention to develop and sell a residential villa project. The land was converted into plots and in the previous year relevant to the Assessment Year 2007-08, the assessee sold 188 cents of land to various parties. In the subsequent years also, the remaining area of the land was sold and in some cases, the assessee entered into agreements with the buyers for construction of villas. The assessee claimed that gain on sale of land is exempted from capital gain on the basis that the land was an agricultural land situated in a Panchayat. However, the Assessing Officer brought 50% of the income on sale of land as capital gain and the balance 50% was assessed as business income. This order was confirmed by the First Appellate Authority and the Tribunal. It is in this background, these appeals are filed and the questions of law framed for the consideration of this Court are the following: