Law:

Section:

Section 2(13) of the Income-tax Act, 1961-Business-Adventure in the nature of trade-Assessee bought several lots of agricultural land, converted land into plots and began selling them within two years of their purchase-Whether impugned sales constituted an adventure in the nature of trade-Held, on facts, yes Facts The assessee purchased agricultural land in three lots during the financial year 1962-63 and in four lots during the year 1963-64. Soon after the purchase, he developed the said land into plots and started selling them in the year 1964. During the assessment years 1970-71 and 1971-72, the assessee realised profits from such sales which he showed in the return as capital gains but the ITO, being of the view that the assessee was carrying on business of sale and purchase of land, assessed them as business income. On appeals, the order of the ITO was confirmed by the AAC as well as the Tribunal. On reference : Held In the instant case the assessee, soon after purchasing the land developed it into residential sites and started selling plots within two years of the purchase. The conclusions on these facts would be irresistible that he acquired the land with a view to selling it later on after developing it and the assessee's activity, therefore, could only be described as an adventure in the nature of trade. Hence, the profits earned by the assessee from selling the plots of land were his business income. Case review G. Venkataswami Naidu & Co. v. CIT [1959] 35 ITR 594 (SC) and Raja J. Rameshwar Rao v. CIT [1961] 42 ITR 179 (SC) followed. Deep Chandra & Co. v. CIT [1977] 107 ITR 716 (All.), Michael A. Kallivayalil v. CIT [1976] 102 ITR 202(Ker.), Janab Abubucker Sait v. CIT [1962] 45 ITR 37 (Mad.) and CIT v. Jalannagar Tea Estate (P.) Ltd. [1962] 45 ITR 626 (Ass.) distinguished. Cases referred to Raja J. Rameshwar Rao v. CIT [1961] 42 ITR 179 (SC), CIT v. Jalannagar Tea Estate (P.) Ltd. [1962] 45 ITR 626(Assam), Janab Abubucker Sait v. CIT [1962] 45 ITR 37 (Mad.), Deep Chandra and Co. v. CIT [1977] 107 ITR 716 (All.),Michael A. Kallivayalil v. CIT [1976] 102 ITR 202 (Ker.) and G. Venkataswami Naidu & Co. v. CIT [1959] 35 ITR 594(SC). Judgment…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492