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TMI Blog1982 (6) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... as partly sold on12-3-1975. Further, sale to the tune of Rs. 2,09,875 was effected during the year under consideration. The ITO after careful consideration of the land transaction was of the view that the same was an adventure in the nature of trade. He, accordingly, treated the same as assessees' business income and equally assessed the profits at one-third of the sale proceeds after allowing the proportionate cost of land. On appeal before the Commissioner (Appeals), it was claimed that the sale of land was assessable as a capital gain as declared by the assessees. The Commissioner (Appeals), however, confirmed the order of the ITO assessing the profit from the sale of land as a business profit. The computation of the profit as worked out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Admittedly, none of the firms are having any dealing in land. On21-9-1970they purchased a sandy plot of land at Bhatinda, measuring 21,057 sq. yds., in equal shares for a consideration of Rs. 1,08,000 from Modi Charitable Trust. Their respective capital accounts in the firms were adjusted for the purpose. It was claimed before the ITO that the land was purchased with the intention to set up an industry or construction of a storage godown. The assessees, however, stated that the plan was abandoned in view of the Indo-Pak war in 1971. The entire plot of land was carved out into different plots of various measurements. Certain portions were also set apart for roads, parks and open space. Out of 21,057 sq. yds. a total area of 15,793 sq. yds. w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 761 1/2 sq. yds. Sold 5. Shri Sunil Vasudeva, the learned counsel of the assessee, and Shri Kulwant Singh, the learned departmental representative, were heard at lengths. The arguments of the learned counsel of the assessee proceeded on the same lines as advanced before the Commissioner (Appeals). Emphasis was, however, laid on the facts that the transaction was an isolatated one ; the purchases was made out of the respective capitals of the assessees ; and the land was parcelled out in plots by making demarcations for roads, lanes, parks and open space but no improvement was made on the land, Since facts of the present case are entirely disting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e due to the Indo-Pak war. It is also established that a fertilizer plant was set up by the Government of India in the vicinity and at the same time a military base was also set up in the adjoining land. From these facts it is necessary to find out what was the real objective of the assessees in acquiring this land and whether such acquisition amounts to an adventure in the nature of trade. The Supreme Court in the case of Janki Ram elaborately discussed the factors to be taken into account while arriving at such an inference. It has clearly indicated that a single factor is not conclusive to make an inference. The mere fact that the assessee made a profitable bargain when it purchased the property and that it had desired to sell the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he acquisition of the plots of land and sold them after four years. He had not purchased any such immovable property at any time before or after. He had also not developed even the plots which he purchased. He had only divided the same and sold as smaller extents and the development of the plots, such as laying of roads, etc., were done by the assessee's vendors... Held, on the facts, that the Tribunal was right in its view that the transaction in question was not an adventure in the nature of trade." 7. Applying the ratio of the decisions above on the facts of the present case, we are of the view that the revenue has not brought on record, any material evidence to show that the transaction in question is in the nature of an adventure in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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