9911796707
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Issues Involved:
1. Assessment of surplus from the sale of Binaki lands as income from an adventure in the nature of trade for the year 1966-67. 2. Assessment of surplus from the sale of three acres of Ajni lands as income from an adventure in the nature of trade for the year 1969-70. 3. Assessment of surplus from the sale of three more acres of Ajni lands as income from an adventure in the nature of trade for the year 1971-72. 4. Whether the six acres of Ajni lands sold in the assessment years 1969-70 and 1971-72 could be considered agricultural lands for the purposes of section 2(14). 5. Legality of reopening the assessment of the assessee for the assessment year 1969-70 u/s 147(b). Summary of Judgment: Issue 1: Assessment of Surplus from Binaki Lands (1966-67) The court examined whether the surplus from the sale of Binaki lands could be considered income from an adventure in the nature of trade. The Tribunal found that the assessee was an agriculturist who had cultivated the Binaki land until its sale. The land was sold to forestall its acquisition, and the purchase was deemed an investment. The court held that the profits from the sale were not taxable under the heading "Business" as income from an adventure in the nature of trade. The first question was answered in the negative and in favor of the assessee. Issue 2: Assessment of Surplus from Ajni Lands (1969-70) The court evaluated whether the surplus from the sale of three acres of Ajni lands could be considered income from an adventure in the nature of trade. The Tribunal found that the assessee had cultivated the Ajni land until its sale and had purchased it as an investment. The court held that the profits from the sale were not taxable under the heading "Business" as income from an adventure in the nature of trade. The second question was answered in the negative and in favor of the assessee. Issue 3: Assessment of Surplus from Ajni Lands (1971-72) The court considered whether the surplus from the sale of another three acres of Ajni lands could be considered income from an adventure in the nature of trade. The Tribunal's findings were consistent with those for the 1969-70 assessment year. The court held that the profits from the sale were not taxable under the heading "Business" as income from an adventure in the nature of trade. The third question was answered in the negative and in favor of the assessee. Issue 4: Agricultural Status of Ajni Lands (1969-70 and 1971-72) The court examined whether the six acres of Ajni lands sold in the assessment years 1969-70 and 1971-72 could be considered agricultural lands for the purposes of section 2(14). The Tribunal found that the Ajni land was agricultural at the time of purchase and had been under cultivation until its sale. However, the court noted that the assessee had obtained permission to convert the land to non-agricultural use and had entered into agreements to sell the land for non-agricultural purposes. The court held that the character of the land had changed and it was not agricultural land at the time of sale. The fourth question was answered in the negative and in favor of the Revenue. Issue 5: Reopening of Assessment (1969-70) The fifth question regarding the legality of reopening the assessment u/s 147(b) was not answered as the assessee did not press for an answer. Conclusion: Questions Nos. 1, 2, and 3 were answered in the negative and in favor of the assessee. Question No. 4 was answered in the negative and in favor of the Revenue. The fifth question was not answered. No order as to costs.
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