Law: Income Tax Act, 1922

Section:

(a) Income-tax-- ---Taxability--Avoidance of incidence of tax is permissible in law. (b) Income-tax---Adventure in the nature of trade or investment--Test--No general or universal test can be laid down for deciding as to whether an isolated transaction of purchase and sale of land by a person carrying on different business was adventure in the nature of trade or an investment--Each case having its own peculiar facts has to be decided on totality of evidence on record and real intention of the purchaser at the time of original purchase--Where assessee purchased a plot with intention of earning profit thereon, gains called by him capital gains, held, would not partake that character and would constitute his income exposed to the exigency of income-tax. Praise &, Co. (Pvt.) Ltd. v. C.I.T.) West Bengal (1966) 60 ITR 566 distinguished. S.K. AR.K.AR. Somasundaram Chettiar. C.I.T. Madras (1963) 47 ITR 336 and Regent Estates Ltd. v. C.I.T. West Bengal (1963) 48 ITR 162 ref. Bachu Bai F.E. Dinshaw, Karachi v. C.I.T. 1967 P T D 170; C . I. T . v . Ashaland Corporation 1982 P T D 241, C .I . T. v . Mana Raj Gupta (1982) 137 ITR 195 and Provident Investment Ltd. v. C.I.T. (1953) 24 ITR 33 mentioned. (c) Income-tax-- ---Taxability--Sale of land--Unless a registered sale-deed is executed in respect of an immovable property the owner is not divested of his right and the property remains vested in him--Contention that assessee, the seller was still the owner of the property as no sale-deed had been executed till then and no profit thus could accrue to him legally which could be offered for tax as the transaction was not at all a sale and there was°, no agreement to sell, was without substance. (d) Interpretation of document-- --Contents of document are important to determine its nature rather than its title or nomenclature given by the parties. (e) Transfer of Property Act (IV of 1882)-- ---S. 54--Transfer of property--'Sale' and 'licence'--Distinction. (f) Transfer of Property Act (IV of 1882)-- ---S. 105--Lease--Definition. (g) Income-tax-- ---Taxability--Assessee allowed partners of a registered firm to enter his plot of land and to raise construction thereon in return…

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