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2013 (11) TMI 616 - ITAT MUMBAIAdventure in trade - investment in land - conversion of land use from commercial to residential cum commercial - intention - Whether a single transaction of purchase and sale would constitute an adventure in the nature of trade - Intention in transaction - Held that:- Since the initial intention was not to carry on business of development of plots and even thereafter the assessee had never intended to carry on the business of development of plots it requested the CIDCO to change the right of user of plot from commercial purpose to residential-cum-commercial purpose only with a view to utilise the property. Since the assessee could not successfully utilise the said plot of land it had to take a decision of assigning the rights to a third party by way of a tripartite agreement - Under the circumstances it cannot be stated that the assessee company was interested in carrying on activity of business in purchase and sale of property. It cannot even be stated as an isolated transaction of purchase and sale of property with an intention to make profit out of such transaction - Merely because the assessee makes some profit in a particular transaction it cannot be treated as an adventure in the nature of trade so long as the initial intention of a person was to hold the property and utilise it for a different purpose. In the peculiar circumstances of the case it can only be said that it is only a case of capital gain and not profit derived from an adventure in the nature of trade - assessee is justified in declaring the amount received from assigning its rights over the plot of land by a tripartite agreement is assessable to capital gains tax - Following decision of G. Venkataswami Naidu & Co. vs. CIT [1958 (11) TMI 5 - SUPREME Court] - Decided in favour of assessee.
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