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ORDER A.K. Menon, J. - The present reference is filed under Section 256 of the Income Tax Act, 1961 (the I.T. Act) and it pertains to assessment year 1988-89. 2. The assessee, an individual who was partner in a partnership firm at the material time, had filed an application seeking reference of ten questions. The following two questions have been since referred to this Court:- "1. Whether on the facts and circumstances of the case, the Tribunal was justified in treating the gains of Rs.16,55,508/- on sale of land as business income as against the assesses claim as long-term capital gains ? 2. Whether on the facts and in the circumstances of the case, the Tribunal had any material to come to the conclusion" that, land sold by the assesses was stock-in-trade of the dissolved firm, hence assessable business income" 3. Dr. Shivram, learned Senior Counsel appearing on behalf of the assessee stated that the only question that really requires to be answered is the question No.2. Before dealing with the said question, it would be necessary to advert to few facts. 4. Under a Partnership Deed dated 1st March, 1982, the assessee and one Smt. Amrutben K. Chedda agreed to do business in partnership as builders and contractors in the firm name and style of "Laxmi Construction Co." The profits and losses were to be shared equally. The partnership came into existence on 1st March, 1982 and was at will. The partnership deed is silent as to its assets or the stock-in-trade existing. It transpires that the said partners purchased two plots of land bearing Survey No.14, Hissa No.2 admeasuring 4406 sq. mtrs. and Survey No.15, Hissa No.2 part admeasuring 8016 sq. mtrs. at village Diwanman, Taluka Vasai, Dist. Thane under a conveyance deed in their favor dated 2nd April, 1982. The partnership firm had agreed to develop the land, however, later decided to dissolve the partnership and a dissolution deed dated 1st April, 1985 came to be executed whereunder the partners decided to treat the partnership assets as their co-owned plots of land and as their personal capital assets. 5. The lands were in their possession and they agreed to take over the plots in their personal capacities as…

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