Dear Friends and Sr.Professionals.
Today’s discussion is relating to
” Where Assessee sold its own Land held for a long time after Development and on plotting basis For a Better Price, Whether the Profit on such Sale of Land will be held as ” Business Income ” or ” Capital Gain “.
The assessee sold its own land after Development on plotting basis for Better Price is not in the nature of Trade or Adventure.
The Term Business has been defined u/s 2(13) which includes any Trade, Commerce, Any adventure in the Nature of Trade, etc. Which Assessee is doing on a regular basis.
When Assessee is selling its own land after development for Better Price there is no Regular Purchase and Sale of Land on a Regular Basis. It is an isolated activity. Hence the development of Land and Selling on plotting Basis for Better Price Occasionally Not on Regular Basis cannot be Held as Trade or Business u/s 2(13).
As the Activity of Selling Own Land after development on plotting basis for Better Price is Not Trade hence Profit cannot be Taxed as Business Income.
Any profit on the sale of land after development on plotting basis occasionally is to be Taxed under the Head CAPITAL GAIN.
This view is upheld by Courts in favor of Assessee by following Judgments:
An isolated or occasional activity of selling own land after development on plotting basis for a Better price is not Trade, No Business Income.
Gain is Taxable under the head Capital Gain.