Law:

Section:

Section 2(13) of the income-tax act, 1961-Adventure in the nature of trade-Assessee was associated with firm carrying on business of sale, purchase and development of land for residential purposes-He purchased agricultural land in area already notified for residential development and made profit by its subsequent sale/acquisition by city improvement trust for certain compensation-No agricultural operation ever carried out by assessee on said land-No provision in revenue law to restrict transfer of such land-Whether transaction amounted to adventure in the nature of trade-Held, on facts, yes Section 2(1) of the income-tax act, 1961-Agricultural income-Whether surplus arising from transaction summarised under caption 'adventure in the nature of trade' was agricultural income-Held, on facts, no Facts The assessee purchased a parcel of agricultural land in November 1964, part of which was acquired by the local City Improvement Trust and the balance land was sold to a firm in March 1967. The assessee claimed exemption on the resultant gains, treating it as agricultural income. The assessee also claimed similar exemption on the sale of agricultural land which had originally been purchased in August, 1966 and subsequently sold to a firm, carrying on the work of developing land for housing purposes, in which he was a partner. The ITO found that the lands in question had not been subjected to agricultural use and treated the relevant profits as the assessee's business income. The AAC found : (i) that the assessee had interest as a partner in several firms carrying on the business of developing land, and that when he bought the first piece of land in 1964, he already knew that the land had been earmarked for non-agricultural use by relevant authorities ; and (ii) that the second land was purchased not for carrying out agricultural operations or as an investment, but for earning profits by selling it. He, accordingly, dismissed the appeal. The Tribunal found that the impugned income arose from an adventure in the nature of trade, because : ( i) the assessee's main source of income was his share income from a firm B which had developed a residential colony ; (ii) the…

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