Law:

Section:

Section 2 (13) of the Income-tax Act, 1961 [Corresponding to section 2(4) of the Indian Income-tax Act, 1922] - Adventure in nature of trade - Assessment years 1949-50 and 1950-51 - Assessee along with his father-in-law formed a partnership to carry on business of generation and supplying electricity - Firm obtained a piece of land on lease and constructed a power house - A company was floated and firm transferred all its assets to said company- In 1945 father-in-law of assessee left partnership and thus assessee became sole proprietor - In 1946 entire land was purchased by assessee - After purchase, assessee got it surveyed, got prepared a lay out plan and parceled out land in plots - Subsequently, these plots were sold by assessee on profit - Whether, on facts, it could be said that there was an organized scheme and design on part of assessee in making purchase and sale of land which indicated that assessee dealer with land as dealer or trader and that it was an adventure in nature of trade - Held, yes Section 255 of the Income-tax Act, 1961 [Corresponding to section 5A(7) of the Indian Income-tax Act, 1922] - Appellate Tribunal - Procedure of - Whether reference to third member will be made only if there is difference amongst members on conclusion on a point, and not a difference in reasoning or reasons for arriving at conclusion - Held, yes FACTS The assessee formed a partnership firm along with his father-in-law for generation and distribution of electricity. For that purpose the assessee obtained a piece of land from Municipality for a period of 18 years. The firm constructed a power house on a portion of the leased land and installed electrical equipment for generating electricity. Thereafter a company was floated and the assessee became managing director of said company. In 1941 the firm transferred the entire electric undertaking including the machinery and equipment together with all other assets to the company. In 1945, the father-in-law of the assessee left the partnership and thus the assessee became the sole proprietor of the business of the firm. On 13-9-1946, the entire land was sold by the municipality to the assessee. According to the…

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