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TMI Blog2020 (2) TMI 1275X X X X Extracts X X X X X X X X Extracts X X X X ..... the above referred to judgment, in my opinion, he came to a correct conclusion that the activity carried by the assessee in the present case is adventure in the nature of trade for the reason that from the beginning assessee s intention is to make profit out of the sale transaction and not to hold it. Assessee s intention is only to make profit out of the transaction, therefore in my opinion, ld. CIT(A) correctly decided that the activity carried by the assessee is adventure in the nature of trade , therefore find no reason to interfere with the order passed by the ld. CIT(A). So far as the development undertaken by the REHWS is concerned, it is not a material fact. The material fact in this case is only intention of the assessee, therefore, find no force in the argument of the ld.AR, therefore same is rejected. Thus, this appeal filed by the assessee is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... aking profit and therefore assessee without doing any agricultural operations, sold the same to the REHWS after conversion into plots, therefore the amount received out of the transaction has to be considered as 'adventure in the nature of trade' and he strongly supported the orders of the authorities below. 7. I have heard both the parties, perused the material available on record and gone through orders of the authorities below. 8. The assessee has purchased the agricultural lands on different dates and subsequently converted the same into non-agriculture. The very same land was plotted and entered into agreement with REHWS on 13/08/2012 and sold the same. One of the important facts in this case is that assessee had purchased the agricultural lands and no agricultural operations are carried out and converted into non-agricultural lands by taking necessary approvals from the competent authority and plotted the same. From the above, it is very clear that the intention of the assessee is to make profit out of the transaction, therefore in my opinion, the entire activity carried by the assessee i.e. purchasing the agricultural land converting into non-agriculture and plotted the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of trade, it is obviously referring to transactions which individually cannot themselves be described as trade or business but are essentially of such a similar character that they are treated as in the nature of trade. It was faintly argued for the appellant that it would be difficult to regard a single or an isolated transaction as one in the nature of trade because income resulting from it would inevitably lack the characteristics attributed to it by Sir George Lowndes in Commissioner of Income Tax v. Shaw Wallace and Company (1932) 59 I.A. 206 'Income their Lordships think", observed Sir George Loundes, " in this Act connotes a periodical monetary return coming in with some sort of regularity or expected regularity from definite sources Then the learned judge proceeded to observe that income has been likened pictorially to the fruit of a tree, or the crop of a field. It is essentially the produce of something which is often loosely spoken of as capital". In our opinion, it would be unreasonable to apply the test involved in the use of this pictorial language to the decision of the question as to whether a single or an isolated transaction can be regarded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operations usually associated with trade or business? Are the transactions of purchase and sale repeated? In regard to the purchase of the commodity and its subsequent possession by the purchaser, does the element of pride of possession come into the picture? A person may purchase a piece of art, hold it for some time and if a profitable offer is received may sell it. During the time that the purchaser had its possession he may be able to claim pride of possession and aesthetic satisfaction ; and if such a claim is upheld that would be a factor against the contention that the transaction is in the nature of trade. These and other considerations are set out and discussed in judicial decisions which deal with the character of transactions alleged to be in the nature of trade. In considering these decisions it would be necessary to remember that they do not purport to lay down any general or universal test. The presence of all the relevant circumstances mentioned in any of them may help the court to draw a similar inference; but it is not a matter of merely counting the number of facts and circumstances pro and con; what is important to consider is their distinctive character. In each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As can be seen from the above, It was held by the Hon'ble Apex Court that if a person invests money in land intending to hold it, enjoys its income for some time and then sells it at profit, it would be a clear case of capital accretion and not profit derived from an adventure in the nature of trade and that cases of realisation of investment consisting of purchase and resale are clearly outside the domain of adventure in the nature of trade though profitable. It was also held by the Hon'ble Apex Court that where the purchase has been made solely and exclusively with the Intention to resell at a profit and the purchaser has no intention of holding the property for himself or otherwise enjoying or using it, it would raise a strong presumption that the transaction is an adventure in the nature of trade. 23. The legal principles laid down by the Hon'ble Supreme Court as mentioned above have been applied to the facts of the assessee's case in order to decide the character of the transactions of purchase and sale of land carried out by the assessee. It is seen that the entire extent of agricultural lands of Ac. 10.05 Guntas held by the assessee were purchased by him du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural lands were not made by him with the intention of holding the said lands as an investment and derive income there from. The facts and circumstances unambiguously indicate that the assessee made purchases of agricultural lands with the sole and exclusive intention to resell the said lands at a profit after converting them into non-agricultural lands. In view of this, the purchases and sale of land by the assessee clearly fall under the ambit of 'adventure in the nature of trade' as per the legal principles laid down by the Hon'ble Supreme Court in the case of G.Venkataswamy Naidu & Co. Vs. CIT (Supra). 25. It has been contended by the assessee that the transactions carried out by him do not represent adventure in the nature of trade as the approval for layout from Ma 9' Planning authority was applied for and obtained as per the discussions held with REHWS and that the entire development work in the land was carried out by the said vendee society at its own cost and risk It was also contended that no marketing efforts were made by the assessee for sale of plots as all the plots were sold to the members of the said society at ,a. predetermined sale price as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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