9911796707
TMI Blog1983 (11) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... epresent an adventure in the nature of, trade ? " The facts noticed in the statement Of case are these. The question arises out of the proceedings for the assessment year 1967-68, the relevant accounting period ending on March 30, 1967. Mrs. Padma Bhandari, the assessee, had purchased land measuring 8 bighas 5 biswas in Village Kilokri near the Mathura Road and Ring Road crossing on August 25, 1958, for Rs. 1, 10,000 by adjustment of displaced persons' claims at Rs. 12,135 per bigha. On March 5, 1963, a notification under s. 4 of the Land Acquisition Act, 1894, was issued by the Delhi Administration notifying the land for acquisition for a public purpose, namely, " Planned Development of Delhi ". The declaration under s. 6 of the same Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the case, the Tribunal held, firstly, that there was no evidence to show that the assessee had incurred any heavy expenditure filling up the land with the intention of developing it as a building site, that, secondly, merely because the land was purchased at a high cost or the land had fetched a high price on acquisition, it would not mean that the assessee had carried out an adventure in the nature of trade, that the assessee's conduct subsequent to the purchase of land in 1958 was not that of a person who tried to develop the land as a building site for sale at profit, that the Department had failed to establish that the transaction made by the assessee in the purchase and sale of this land represented an adventure in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in the order of the Addl. District judge dated February 28, 1967, which forms part of the statement of the case. The relevant portion is: ".. ...... The fact remains that the claimants acquired land near the crossing of main Mathura Road and Ring Road had a potential value as building site. It, however, suffered from this defect that its level was lower than that of the adjoining land. It was described as " Ghairmumkin Nala " in the revenue records and the Land Acquisition Collector actually found it low lying, for which reason he placed it in Block II. good deal of expenditure had, therefore, to be incurred by the claimant in raising its level, so as to utilise it for construction purposes. Hence, on consideration of all these factors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the evidence in order to ascertain whether the Tribunal could hold the view on the material that the assessee did not effect any improvement on the land. The reference has, therefore, to be answered on the basis of the finding of fact that the assessee did not effect any improvement of the land. The question to be considered is whether the surplus realised is as result of any adventure in the nature of trade. The expression " adventure in the nature of trade " came to be considered by the Supreme Court in G. Venkataswami Naidu & Co. v. CIT [1959] 35 ITR 594. It was held (p. 607): " When section 2, sub-section (4), refers to an adventure in the nature of trade, it clearly suggests that the transaction in question cannot properly be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay High Court in CIT v. Himalayan Tiles & Marble P. Ltd. [1975] 100 ITR 177. In a subsequent case, Dalmia Cement Ltd. v. CIT [1976] 105 ITR 633, the Supreme Court held that the onus of proving that a single and isolated transaction of purchase and sale is a transaction in the nature of trade lies on the Department. The first factor is whether the assessee is a trader and whether the purchase and its resale is allied to usual trade or business or incidental to it. The answer to this factor is in the negative. The assessee had not ever dealt in the purchase or sale of the land. She purchased on March 22, 1957, a piece of land at Hauz Khas for Rs. 10,059. The assessee gifted half of this land to her grand-daughter, Malini Devi, on June 24, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , however, a circumstance in favour of the Department and against the assessee. The third factor is as to whether the assessee by any act subsequent to the purchase improved the quality of the land purchased and thereby made it more readily resaleable. The finding of fact recorded by the Tribunal is that the assessee did not effect any Improvement on the land, The next incident is the incident associated with the purchase and sale. In this case, the assessee had to suffer acquisition. The land was compulsorily acquired by the Delhi Administration under the Land Acquisition Act, 1894, for a public purpose, namely, " Planned Development of Delhi ". At best it can be the passive submission of the assessee and not an active participation which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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