TMI Blog1996 (2) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... land is within the municipal limits. By various sale deeds, executed in favour of 44 persons between April 1980 to December 1980, different parcels of lands were sold through two commission agents. 3. On these facts, for the assessment year 1981-82, the ITO came to a finding that the sales in question constitute an adventure in the nature of trade and treated the income earned as business income for the purpose of tax. 4. In appeal by the assessee, the AAC after examining the fact came to the conclusion that merely because the sales were through a broker with a view to get best possible price of the property, the transaction of sale cannot be held to be an adventure of the assessee in the nature of trade. The Appellate Commissioner re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the learned counsel appearing for the Department, placed reliance on Sarifabibi Mohmed Ibrahim v. CIT [1993] 204 ITR 631 (SC)1 and CWT v. Officer-in-charge ( Court of Wards) [1976] 105 ITR 133 (SC). On behalf of the Department, much emphasis has been laid on the facts and circumstances that long after partition, the land was divided into several plots and sold to 44 persons through brokers indicating that a sort of business adventure was undertaken by the assessee to earn profit. It is not a case of isolated transaction to hold that it was only conversion of capital asset into any other asset. The learned counsel referred to the definition of 'Capital asset' and provisions contained in sections 28, 45 and 47 of the Act to elucida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt support the case of the assessee. In the case of Kasturi Estates (P.) Ltd. (supra) , on similar facts, it is held as under : . . . That the transaction of sale in plots was one which any prudent owner of land would enlarge in and which was, therefore, no more than realisation of a capital investment or conversion of land into money, and not a venture in the nature of trade. Having regard to the nature of the property, length of its ownership and holding, actual conduct of the assessee in respect of it all along and all other facts including absence of evidence of any trading activity or speculative venture, the Tribunal was right in its conclusion that the surplus from sale of the land did not result from any trade or business in lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the transaction were not assessable as business income. 11. The decision of the Supreme Court in the case of Sarifabibi Mohamed Ibrahim (supra) relied on behalf of the Department, is not on the point in issue. There the question was whether the sale in question was of non- agricultural or agricultural land within the meaning of section 2(14) of the Act. In answering that question also, the Supreme Court affirmed the view of the High Court that the land in question at the time of sale was non- agricultural and the income derived from it was held to be not exempt from tax as capital gains. The case of the Supreme Court in Sarifabibi Mohamed Ibrahim's case (supra) , therefore, in a way goes contrary to the contention advanced on be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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