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TMI Blog1984 (12) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... see were not void ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the true profit earned by the assessee from the sale of plots during the year ending March 31, 1970, can be ascertained and are liable to tax ? " The facts that we could gather from the statement of the case are these : The assessee is a building contractor. The assessment year concerned is 1970-71. On March 15, 1968, he purchased a land measuring 20,131 sq. yds. in the heart of the city of Mysore from H.H. Maharaja of Mysore, for a consideration of Rs. 2 lakhs. The assessee divided this land into plots and sold the same during the previous year ending March 31, 1970, relevant to the assessment year 1970-71. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed only when the transaction of sale was completed. The Tribunal considered and rejected all these contentions. The Tribunal reached the conclusion that the assessee had no intention at the time of purchasing the land to build a cinema theatre or a hotel and his only intention was to divide the same into house sites and to sell the same on profit. The Tribunal also held that the profits made from the transaction is liable to assessment irrespective of the fact whether the assessee had title or not. As regards the covenant to indemnify the purchasers by the assessee, the Tribunal observed that it was a common covenant to be found in all sale deeds and if there is a doubtful title, the seller has to indemnify the purchaser as require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re. So ran the conclusion reached by the Tribunal. A similar case came up before this court in CIT v. Ramaiah [1984] 146 ITR 39 (Kar) and CIT v. Narasimha Reddy [1984] 150 ITR 347 (Kar). This court after applying the principles enunciated by the Supreme Court in Venkataswami Naidu Co. v. CIT [1959] 35 ITR 594 (SC), Raja J. Rameshwar Rao v. CIT [1961] 42 ITR 179 (SC) and Janki Ram Bahadur Ram v. CIT [1965] 57 ITR 21, has held that if the assessee purchased land, converted the same into house sites and disposed of the same for attractive prices, then his transactions may be stamped with the character of an adventure in the nature of trade. The cumulative effect of all circumstances in the present case lies squarely and fairly within the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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