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TMI Blog1979 (2) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... for Rs. 30,160 earning thereby a surplus of Rs.28,913. This surplus was treated as a capital gain by the income-tax department. The contention of the assessee was that the sale was effected to enable her to purchase a bigger plot. In S. Y. 2012, the assessee purchased another plot in the same locality admeasuring 804 sq. yards for a sum of Rs.2,791. This plot of land was subsequently sold by her after a short interval for the sum of Rs. 24,000 resulting in the surplus of Rs. 21,209. The sale was effected in S.Y. 2014. Again the contention of the assessee that this surplus was a capital gain was accepted by the income-tax department. It may be mentioned that the purchaser of the latter plot was Messrs. Swastic Construction Company in which the assessee was a partner. The business of that company was to construct buildings and one building was subsequently constructed on this plot. Thereafter, the assessee purchased a big plot consisting of 8 sub-plots in the very same locality for the total sum of Rs. 66,301. All the purchases were effected in S.Y. 2013. The details of these eight plots, the name of the assessee's vendor, the area and the purchase amount are as under : ----------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nicipality was about to give possession. It was found that the assessee had entered into a series of such transactions year after year. There was a clear intention to earn profit. In this view, for the year under consideration the ITO was of the view that the surplus was required to be considered as a revenue gain. The aggrieved assessee carried the matter in appeal to the AAC. The AAC also noted the number of land transactions entered into by the assessee. It was contended before the AAC that the sales effected by the assessee were in the nature of realisation of investment and could not be considered as an adventure in the nature of trade. It was also pointed out that the assessee had ample funds. It was urged before the AAC that the assessee was required to sell the sub-plots because she had lost all hopes of getting possession and felt that it would be better to transfer these rights and re-invest the amounts realised elsewhere. The AAC felt unable to accept these submissions. Reliance was placed on the frequency of the transactions. The AAC felt further that the assessee was not able to show that she had purchased the plots either as investment or for constructing a resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n did not develop suddenly in S.Y. 2016 which was the year under consideration in the appeal. The Tribunal, accordingly, upheld fully the conclusions as well as the calculations made by the ITO. It is from this decision of the Tribunal that the following three questions have been referred to us : " 1. Whether, on the facts and in the circumstances of the case, the sum of Rs. 53,394 realised by the applicant on transfer or sale of certain plots of land situate in the city of Bombay has been rightly treated as the income of the applicant from an adventure in the nature of trade and is liable to income-tax ? 2. Whether the alternative claim of the applicant to substitute the market value on the date of conversion of the loan into stock-in-trade was rightly rejected ? 3. Whether there was evidence to justify the finding that the applicant's intention throughout seemed to have been to sell the plots at a profit? " It is clear that question No. 3 is based on the alternative submission urged before the Tribunal which also the Tribunal rejected. The learned counsel for the assessee pointed out that in her examination as well as in subsequent letters addressed to the ITO, it has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own in our judgment the facts in Janki Ram's case [1965] 57 ITR 21 (SC) as also the facts in P. M. Mohammed Meerakhan's case [1969] 73 ITR 735 (SC) inasmuch as the facts in neither case are or can be identical with the case before us. It has to be conceded that the facts on which the decision was given against the assessee in P.M. Mohammed Meerakhan's case were a little stronger for the revenue than the facts before us. On those facts (summarised at page 742 of the report) it is abundantly clear that the assessee had earned profit in the course of a profit-making scheme and, therefore, the surplus realised was required to be considered a revenue surplus as having arisen out of an adventure in the nature of trade. Having, however, given anxious consideration to the submissions made on behalf of the assessee, we are of opinion that the overall impression left by the course of transactions entered into by the assessee before us would result in the same conclusions being reached as were arrived at by the ITO and subsequently confirmed by the AAC and the Tribunal. Mr. Mehta on behalf of the assessee submitted that the sales effected by the assessee for the earlier years should be ignor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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