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2017 (9) TMI 467 - AT - Income TaxReceipt of security deposit - business income or capital gain - nature on income - Held that:- In order to hold that an activity is in the nature of an adventure, there must be positive materials to prove that the assessee intended to trade in such an activity. Moreover, the expression “adventure in the nature of trade' appearing in the definition of 'business' postulates the existence of certain elements in the adventure which in law would invest it with the character of trade or business. In this regard, it is observed that the A.O. has erred in the present case in taxing the receipt of Security Deposit as an income in the realm of “Adventure in the nature of trade” because there has to be at first a transaction in the nature of purchase or sale resulting in a gain or profit. On the contrary, there has been no such transaction/ and thus there is no gain or profit. In the absence of these two important ingredients it cannot be said that there has been taxable income. Thus we are of the considered view that Ld. CIT(A) has rightly deleted the addition on account of impugned receipt of security deposit as income of the assessee as Adventure in the nature of trade, which does not need any interference on our part, hence, we uphold the order of the Ld. CIT(A) on the issue in dispute and reject the ground in dispute raised by the Revenue.
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