Law: Income Tax Act, 1961

Section: 2(13)

Income-tax-----Income from other sources or business income---Meanings of "business", "trade" ---Commission received on real estate transaction---Is business income--Indian Income Tax Act, 1961, S.2(13). On the question whether the commission received by the assessee-¬company on a real estate transaction was income from other sources or business income: Held, that trade means a business which a person has learnt or carries on for procuring subsistence or profit; occupation or employment. The commission received in the real estate transaction was, therefore, income arising out of business. JUDGMENT D.N. BARUAH, J. ---At the instance of the Revenue, the following question has been referred by the Income-tax Appellate Tribunal under section 256(1) of the Income Tax Act, 1961 (for short, "the Act"), for the opinion of this Court: "Whether, on the facts and in the circumstances of the case, the Tribunal is correct in fact and in law in holding that the assessee's income from commission amounting to Rs.15,00,000 is assessable under the head 'income from business'?" The facts of the case are that during the previous year relevant to the assessment year 1984-85, the assessee received commission of Rs.15,00,000 from Aditya Construction and Development Ltd. on a real estate transaction. The assessee claimed such commission as income from business. The Assessing Officer did not accept the same and treated the commission as income from other sources. Being aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) allowed the appeal holding that the aforesaid income was income from the business of real estate transaction. The Revenue, therefore, took up the matter before the Income-tax Appellate Tribunal. The Tribunal upheld the decision of the Commissioner of Income-tax (Appeals). Hence, the present reference. We have heard Shri G.K. Joshi, learned senior standing counsel, assisted by Shri U. Bhuyan, standing counsel for the Department, and Mrs. M. Hazarika, learned counsel appearing on behalf of the assessee. According to Shri Joshi, the real estate transaction is not a business because a real…

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