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2019 (12) TMI 1239 - AT - Income TaxNature of activity - Capital Gains/loss or income from business - sale of flats - stock in trade or investment - AO observed that sale of property has been done in a systematic, repetitive manner - HELD THAT:- We find merit in the contentions of the assessee that if the intentions were to deal on a systematic and repetitive manner, then no businessmen will lock its funds for three years for his trading activities. Assessee, after selling these flats has not acquired any additional flats by re-investing the sale proceeds of these sold flats. Also the fact remains that the above assets are appearing under ‘investments’ in the balance sheet of the assessee. The principle underlying the distinction between a capital sale and an adventure in the nature of trade were examined in Venkataswami Naidu & Co (G) v. CIT [1958 (11) TMI 5 - SUPREME COURT] where it was held that the character of a transaction cannot be determined solely on the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case. Also in Janki Ram Bhadur Ram v. CIT [1965 (3) TMI 19 - SUPREME COURT] held that if the assessee, even at the time of acquisition had a clear intention to resell it, that would be material but not a decisive consideration. We are inclined to agree with the treatment given by the assessee in his return of income as gains/loss from sale of such flats under the head ‘Capital Gains’. - Appeal filed by the assessee is allowed.
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