TMI Blog2004 (10) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the sale deed in favour of the prospective buyers were to be executed jointly by the assessee and the builder and promoter. There was no adventure in the nature of trade so far as the assessee is concerned - Thus it could not be said that the assessee had thrown the land in question into any business as her stock-in-trade - no infirmity in tribunal's finding - - - - - Dated:- 14-10-2004 - Judge(s) : B. C. PATEL., BADAR DURREZ AHMED. JUDGMENT The judgment of the court was delivered by B.C. Patel C.J. - At the instance of the Revenue, this court vide order dated August 23, 1991, directed the Tribunal to state the case and to refer the following question: - "Whether, on the facts and in the circumstances of the case, the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uidelines issued by the Delhi Administration vide order No. 36(3)/8/L B/ULCR dated October 16, 1978, on the basis of the provisions contained in the Act as well as the notifications, exemption was granted by the Delhi Administration vide order dated January 15, 1982, for the purpose of construction of group housing scheme on the plot in question, subject to the conditions specified therein. After exemption, granted as aforesaid, the assessee entered into an agreement on January 15, 1982, with M/s. Bhasin Properties, H3/12, Model Town, Delhi, through its partner, Shri Om Prakash Bhasin. Clause 3 of the agreement being relevant is required to be reproduced hereunder: "(3) The assessee was to be paid by the builder and promoters Rs. 20 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 12 lakhs was received". It is in view of this it was held that these receipts were from joint business venture with M/s. Bhasin Properties and taxable in the hands of the assessee as business income. While the Commissioner of Income-tax (Appeals) held that "therefore, even if it is stated that the initial intention was not to sell the plot, the subsequent events do show that the assessee entered into a transaction in the nature of a trade" and confirmed the assessment order in so far as the issue of adventure in the nature of business was concerned. On behalf of the Revenue, reliance was placed on paragraphs (11) and (12) (which pertain to clauses of the agreement) at page 56 of the paper book and which read as under: "(11) The sale d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the commodity and its resale were allied to his usual trade or business or incidental to it; the nature and quantity of the commodity purchased and resold; any act subsequent to the purchase to improve the quality of the commodity purchased and thereby make it more readily resalable; any act prior to the purchase showing a design or purpose, the incidents associated with the purchase and resale, the similarity of the transaction to operations usually associated with trade or business; the repetition of the transaction; the element of pride of possession. A person may purchase a piece of art, hold it for some time and if a profitable offer is received sell it. During the time that the purchaser had its possession he may be able to cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case, the court pointed out as under: "In order to find out whether a transaction of purchase and subsequent resale amounts to an adventure in the nature of trade, the initial intention of the purchaser is a very important relevant factor, but it is not conclusive. The subsequent events and the conduct of the assessee are also important factors and the question is to be decided on a consideration of the totality of the facts and circumstances. The relevant facts to be seen in this behalf are: first, as to whether the transaction was in the line of business of the assessee and, secondly, whether it was an isolated or a single instance of the business or there was a series of similar transactions. Where a transaction is not in the line of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the permission and entered into an agreement with a developer (the builder). It was emphasised by counsel for the Revenue that the agreement was executed by the owner as well as the flat purchaser and in view of this, it can be said that the property was thrown into a business and the property was held for adventure in the nature of business. We are unable to agree with the submissions because from the documents it is very clear that on the assessee's part there is only an intention to transfer the land and not the portion that may be constructed by the builder on a future date. Clause 3 merely provides the mode of payment. The Tribunal, in the facts and in the circumstances of the case, arrived at a finding as under: "It will be seen t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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