TMI Blog1980 (12) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to in the appellate orders, arose out of an adventure in the nature of trade and was, therefore, rightly assessed to tax ? 2. Whether, on the facts and circumstances of the case, the lands in question could be held to be agricultural lands ? 3. Whether, on the facts and circumstances of the case, it could be held in law that there could be an adventure in the nature of trade in agricultural lands, particularly in view of the provisions of revenue law restricting the transfer of such lands ? 4. Whether, on the facts and circumstances of the case, the surplus was not assessable as being in the nature of agricultural income and hence exempt under the Income-tax Act? " The material facts giving rise to this reference, briefly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, of which the assessee was partner. The ITO found that no evidence was led by the assessee to show that the land in question was ever subjected to agricultural operations by the assessee. The ITO further found that the assessee was a partner of M/s. Badrilal Bholaram Sons, carrying on the business of developing lands. In this view of the matter, the ITO held that the profit realised from the sale of this land was a business income of the assessee. Aggrieved by the orders passed by the ITO, the assessee preferred appeals before the AAC. The AAC held that the assessee belonged to a family which had been carrying on the business of purchase and sale of land with or without development, that the assessee had interest as a partner in seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and sale of land for a few years prior to the assessment year 1965-66, that the assessee had got supervision charges in those years for supervising the development work and that the material on record clearly indicated that, the assessee was very much connected with the business of purchase and sale of land and its development. The Tribunal further found that the assessee had no intention of carrying out agricultural operations in the land and his only intention was to make a profit by getting a higher amount of compensation than the purchase price. The Tribunal found from the material on record that the income derived by the assessee by a sale of the lands in question was from an adventure in the nature of trade. In this view of the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of trade, i.e., whether there are certain elements in the adventure which in law would invest it with the character of a trade or a business. The onus to prove the existence of these elements is undoubtedly on the Department. We have, therefore, to examine whether the inference drawn by the Tribunal that the transactions in question are transactions in the nature of trade is, in law, justified. Now, the various decisions relied on by learned counsel for the assessee do not purport to lay down any general or universal test. It would not, therefore, serve any purpose to examine every decision in detail. As held by the Supreme Court in G. Venkataswami Naidu Co. v. CIT [1959] 35594, in each case, it is the total effect of all the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to us is, therefore, in the affirmative and against the assessee. With regard to the second question referred to this court, learned counsel for the parties agreed that the lands in question were agricultural and that there was no material on record to the contrary. As regards the third question referred to this court, learned counsel for the assessee contended that there were restrictions on the transfer of land and hence there could be no adventure in the nature of trade. Learned counsel for the assessee was, however, unable to point out any provision of law which placed a bar on the sale of agricultural land. Our attention was invited to s. 165 of the M.P. Land Revenue Code, 1959. But that section does not prohibit the sale of agric ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
