9911796707
TMI Blog1980 (7) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... so derives income by way of dividend and from investment in property. The assessment year is 1969-70, the relevant previous year being Samvat year 2024. It appears that the assessee had purchased 7,422 sq. yds. of land at Vadaj in S. Y. 2007. The said land was sold by the assessee in S. Y. 2024. According to the assessee, the sale resulted in a profit of Rs. 12,365. The assessee had also purchased another piece of land admeasuring 5,610 sq. yds. situate at Sabarmati jointly with one Ratilal Panachand on September 24, 1956 (S.Y. 2012). A portion of the said land admeasuring 2,077 sq. yds. was also sold in S. Y. 2024. According to the assessee, the said sale resulted in a profit of Rs. 36,475. The assessee filed a return of income for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged only if it was shown that the transaction was an adventure in the nature of trade. In the view of the Tribunal, the assessee was not shown to have converted its capital asset in the shape of land into stock-in-trade and, therefore, the profit realised on the sale of the said capital asset was not capable of being taxed per se as business income. The Tribunal further found that merely because a money-leader acquires immovable property " in lieu of an advance ", the immovable property cannot assume the character of stock-in-trade unless it was treated as such. The Tribunal also emphasised that the fact that the assessee had retained the lands in question over a long period of time without making any improvement and without taking any act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax as business income only if it was shown that the transactions were an adventure in the nature of trade. The Tribunal also rightly found that the initial onus is on the revenue to establish that fact. No fault in fact can be found, therefore, with the general approach of the Tribunal to the case in hand. It is well settled that a transaction of purchase or sale of land cannot be assumed, without more, to be an adventure in the nature of trade (see Janki Ram Bahadur Ram v. CIT [1965] 57 ITR 21 (SC)]. Herein the assessee, a money-lending firm, has been shown to have sold two pieces or parcels of land without making any improvement after a long period of time after their purchase. The Tribunal relied upon the said circumstances and hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e profit realised from the sale of the lands was returned by the assessee as capital gain and not as business profit. It has not been found that the assessee was authorised by the partnership deed to purchase or sell the lands in the course of its business. Against this background the Tribunal's finding that the transactions are not an adventure in the nature of trade is fully justified. It is true that in the past, on one occasion, when profit was realised on the sale of another piece or parcel of land, the assessee had treated it as its business income and that it was also assessed as such. This circumstance, though relevant, is not conclusive in the course of the assessment proceedings for the subsequent years and its effect has to be ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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