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TMI Blog2015 (12) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of law for consideration: "Whether the Income Tax Appellate Tribunal was correct in law in holding that the amount of Rs. 9,32,855 was assessable as an adventure in the nature of trade' and not lone term capital gain' as declared by the appellant?" 3. The brief facts leading to filing of the present appeal are that the Appellant, Smt. Raj Dulari Bhasin, aged about 94 years, who is having no regular source of income, was an owner of a house property at X-24, Hauz Khas, New Delhi ('the property in question'). The land on which the property in question was located, had been acquired by her on 18th March 1958 for a sale consideration of Rs. 5,500. The land was purchased and the house so constructed was for self use and had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was mutually decided that the contractor will give one flat to the Assessee to be constructed at the second floor having cost of Rs. 5,32,855. In additions to this the Contractor will give the difference of sales price and cost of construction as mentioned in clause no. 2 of this agreement." 6. A deed of general power of attorney was executed by the Assessee in favour of the builder on 1st April 1989. The builder was inter alia authorized to sell the property in question to any other person, sale deed, mortgage deed/gift deed etc., to produce before the sub-Registrar concerned for registration and to get the same registered, receive the consideration thereof and to acknowledge the receipt of the same to deliver the possession. 7. The net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding the extent of construction carried out on the plot: Existing covered area before construction Sq.ft Covered area demolished before construction Sq.ft. Covered construction by MAC Consolidation Sq.ft. Basement -- -- 900 Ground Floor 780 -- -- Front first floor 1470 1357.50 2250 Rear first floor -- -- 2250 Front second floor 1125 1125 2250 Rear second floor -- -- 2250 Total Sq.ft. 9900 11. Earlier, by a separate letter dated 22nd October 1997, the Assessee has furnished the names and addresses of the parties to whom the flats were sold. It appears that the rear and front flats on the first floor, the front flat on the second floor and the basement were sold to the different partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 4 lakhs = Rs. 9,32,855/- was treated as the income of the Assessee under the head profit and gains of business. 13. The appeal filed by the Assessee before the Commissioner of Income Tax (Appeals) ['CIT (A)'] was dismissed on 8th March 2000. While dismissing the appeal filed by the Assessee against the order of the CIT (A), the ITAT held in the impugned order as under: "24. It is quite apparent from the facts of the case that the intention of the Assessee at the outset was to get the flats constructed by the contractor deploying his own funds (the contractor's) and receiving in the process a sum of Rs. 4 lakhs being the excess of sale consideration over the cost of construction of the flats as also a flat on the second floor, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what was sold was also a pro-rata 17% of the share in the land. However, for the purpose of computation of taxable income arising from the sale of the flats only the cost of construction was considered. 16. On the other hand Mr. C.S. Aggarwal, learned Senior counsel for the Assessee, placed reliance on the decision of this Court in Shanti Banerjee (decased) by LRs v. Dy. Commissioner of Income Tax (decision dated 17th November 2015 in ITA No. 299 of 2003) where in similar circumstances the Court held that the transaction was not an "adventure in the nature of trade" and the receipt therefrom was not business income. As regards the plea that the construction took place on the additional portion of land apart from the originally constructed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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