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TMI Blog1985 (5) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ll those persons and that each one of them would have a share in the said property in proportion to his respective contribution towards the purchase price. On 7th Oct., 1962, there was an agreement between Shri Champalal H. Kothari and one Shri Prakash I. Bhatia under which Shri Champalal H. Kothari agreed to sell a portion of the aforesaid land measuring 1710 sq. yds at the rate of Rs. 90 per sq. yd. This agreement contained a clause whereby the said Prakash I. Bhatia agreed to obtain conveyance directly for the said company, either in his favour or in favour of his nominee. Shri Prakash I. Bhatia made an agreement with one Shri Chaganlal D. Gugale to sell 1710 sq. yds. of the land to him. On 30th March, 1963 the said company executed two sale deeds one in favour of Shri Chaganlal D. Gugale in respect of 1710 sq. yds and the other in favour of Shri Champalal H. Kothari, his wife and the minor children referred to above, in respect of the balance area of land admeasuring 9690 sq. yds. out of the said 11400 sq. yds. On the same day, that is 30th March, 1963, the remaining plot admeasuring 9690 sq. yds. was divided into four plots and each plot was allotted to two of the said eight p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions referred to above, which were rejected by the ITO. However, the assessment that the ITO made on the AOP in respect of the said business income was on protective basis. He observed that the assessments of the members of the said AOP would be reopened and the share of income would be assessed in the individual assessment of each member. Accordingly, he added Rs. 17,955 in the individual assessment of Shri Kantilal s. Kothari. ITA No. 1280/Bom/82 arises out of the proceeding of the assessment of the AOP, while ITA No. 4170/Bom/82 arises out of the assessment proceedings of Shri Champalal Kothari as individual and ITA No. 4169/Bom/82 arises out of the assessment proceedings of assessment of Shri Kantilal C. Kothari. 6. In the appeal filed by Shri Champalal Kothari and others AOP the CIT (A) held that the land in question was at the relevant time an agricultural land and as such, it was not capital asset as defined in s.2(14) of the IT Act. He further found that the transaction was not an adventure in the nature of trade. Consequently, according to him the surplus arising out of the sale of 1710 sq. yds of land out of 11400 sq. yds. did not constitute either capital gain or bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate that the said recital in the agreement was false. The said land is described as agricultural land in indenture dt. 30th March, 1963 executed by the company in respect of the said land. The CIT (Appeals) has observed that photostat copies of certificates issued by the Talatihi and Bill Collector Ghatkoper indicated that paddy was being cultivated in the land right from 1956 to 1963-64. The authenticity of the said record is not challenged. The said entries clearly indicated that the land was agricultural land till the end of 1963. Subsequently, the land revenue for the entire period has been paid on the basis that it was an agricultural land. It is true that the land revenue was paid subsequently. However, it pertains to the reverent period. The revenue authorities accepted the land revenue on the said basis that it was an agricultural land at the relevant time. All these facts clearly indicated that the land in question was agricultural land at the relevant time. All these facts have not been given due weight by the ITO. The CIT (A) has taken into account of these facts and come to the conclusion that the land in question was agricultural land at the relevant time. After consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of purchase. Considering all the circumstances, mere fact that a small portion of land was sold within few months of purchase would not mean that the transaction was in the nature of trade. The original intention appears to be that of investment and when it was found that a very high price was being available within few months, a portion of the land were sold. If the intention at the time of purchase had been to deal in land, the entire land or atleast a large portion thereof would have been sold when a very high price was available within few months of purchase. However, we find that only a small portion of land was sold, while the major portion was given on long lease. In the circumstances, the fact that Shri Champalal Kothari at the relevant time was an estate broker does not indicate that the intention was otherwise. After considering the entire circumstances, we are of the opinion that the ld. CIT (A) has arrived at a correct conclusion in holding that there was no adventure in the nature of trade and that the transaction of purchase was entered into with a view to make investment. 10. In this contention, decision of the Kerala High Court in M. Raman Pillai vs. CIT (1964 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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