TMI Blog1998 (6) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... and not as profit from adventure in the nature of trade assessable under the head "Business" and as to whether the Tribunal's view that the purchase and sale of lands at Poona has been made by the partner of the assessee firm only as an investment and not as a stock-in-trade is based on material on record and reasonable on the facts and in the circumstances of the case. The undisputed facts are that the assessee carries on business as cloth merchant in the city of Madras. One of the partners, on behalf of the firm, entered into an agreement for purchase of land in the city of Poona. That agreement was entered into on July 25, 1964. Under the terms of that agreement, the vendee could obtain a sale deed in his own name or in the names of hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... features that make up trade or business but not only by all of them, and that even an isolated transaction can satisfy the description in the nature of trade. However, the court, in the same judgment sounded a strong note of caution by observing that it is impossible to evolve any formula which can be applied in determining the character of isolated transactions which come before the court in tax proceedings. The court held that the decision about the character of a transaction in the context cannot be based solely on the application of any abstract rule, principle or test and must in every case depend upon all the relevant facts and circumstances. The facts and circumstances which are relevant for the purpose of deciding the present ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit if possible from the plot, the intention to earn profit by itself cannot be decisive as to whether a transaction is in the nature of an adventure which could be characterised as trade. A person may very well buy a plot of land with the idea of reselling the same at a later point of time at a profit. When such a property is resold, the profit earned on that transaction is not to be regarded as business income solely on the ground that at the time of the initial purchase, the assessee had hoped to make a profit at a future point of time. Investment can be made not merely in movables, but, in immovable property as well. There is no presumption in law that all agreements to purchase or actual purchase of immovable property and any subse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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