TMI Blog2001 (9) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... disposing the ground No. 3 raised before CIT (A) that the appellant had deposited Rs.60,00,000 with Punjab National Bank on 30-8-1995 and not on 1-9-1995 leading to denial of benefit under section 54F of the Income-tax Act. 5. The learned CIT (A) erred in not giving a finding on the material filed before him which showed that the account was opened by the appellant on 30-8-1995 and not on 1-9-1995 as held by the Assessing Officer. 6. Without prejudice to the above, the learned CIT (A) erred in not granting deduction under section 54 on account of technical breach of making delayed payment in the capital gain account. The appellant had complied with all other procedures and had also invested in the flat within the time limit laid down." One additional ground was also taken, which reads as follows: "1. On the facts and in the circumstances of the case and in law the learned CIT (A) erred in confirming the re-assessment made by the Assessing Officer under section 147." 2. At the time of hearing, the learned counsel though argued at length in respect of additional ground, but later on he expressed his desire not to press the same, therefore, additional ground raised by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee stated that the commission of Rs.12,253 was earned by the assessee from M/s. Sawalka Co., Ludhiana. This was assessee's income from business. The assessee was a partner in M/s. Elite Auto Industries. The firm was manufacturing auto parts and electrical goods. This partnership business was carried on for 25 years upto 1988 and the said firm was dissolved due to disputes between the partners. Thereafter the assessee took the agency of Hero Honda MotorCycles. The said business was carried by the assessee in his HUF capacity in partnership with his wife. Subsequently, this agency too was terminated. The assessee had been visiting Ludhiana frequently due to the fact that his in-laws were staying at Ludhiana. The assessee was looking for new avenues in respect of business. In the process, the assessee met Mr. S.C. Sawalka. Assessee agreed to introduce customers to Shri S.C. Sawalka who agreed to give assessee commission @ 2% in respect of business introduced. The assessee introduced NESLE India, Jagrao Cooperative Sugar Mills etc. to Sawalka firm and in turn earned commission. Thus, the assessee earned business income and which was shown as business income in the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... broad sense rather than a restricted sense. In support of this contention, he relied on the decision of Hon'ble Supreme Court in the case of Mazagaon Dock Ltd. v. CIT [1958] 34 ITR 368. He further contended that even a single and isolated transaction can constitute a business adventure in the nature of trade, provided the transaction bears clear indicia of trade. For this contention he placed reliance on the decision of Hon'ble Supreme Court in the case of Narain Swadeshi Wvg. Mills v. CEPT [1954] 26 ITR 765. Further, he contended that commission received by the assessee in connection with real estate transaction was held to be income from business by Guwahati High Court in the case of CIT v. Assam Hard Board Ltd. [1997] 224 ITR 318. Similarly, income from brokerage was held to be income from business or profession by the decision of Hon'ble Rajasthan High Court in the case of CIT v. Prakash Narain [1995] 213 ITR 182. Referring to the decision of Tribunal in the case of Sobhagmal Nemchand Co. v. ITO [1987] 22 ITD 73 (Indore), he contended that income from Hundi (dalali activity) was held to be income from business. 9. He further contended that the provisions for granting exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business connotes some real, substantial and systematic or organised course of activity or conduct with a set purpose. In the case of Narain Swadeshi Wvg. Mills it was held that activity of letting out Plant Machinery etc. after cessation of manufacturing operation and sale of land and building do not amount to carrying on business. Thus, the learned DR contended that the assessee had not been carrying on any business. The income shown from commission was only an income from other sources. Thus, due date for filing of return by the assessee falls on 30-6-1995 and as the assessee had not deposited the amount with the bank to avail exemption under section 54F, the claim of the assessee has rightly been disallowed. 14. In reply the learned counsel of the assessee contended that there is a difference between regular business and business. In the statement it was admitted by the assessee that he was having no regular business. He contended that exact details of items supplied years back cannot be given in a statement. Bills were furnished before Assessing Officer. The Assessing Officer could have further enquired about those details which course was not adopted by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls. 18. It has been also held by Delhi High Court in the case of Bharat Insurance Co. Ltd. that a business is a term of wide amplitude which includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. Even though the words are wide, but underlying each of them is the fundamental idea of continued exercise of an activity. The frequency or repetition of activity, though at times a decisive factor, is by no means an unfallible test, and transaction though repeated may not amount to a trade or an adventure in the nature of trade. Conversely, an isolated adventure may fall within the definition of business. Ordinarily business implied a continuous activity in carrying on a particular trade or a vocation, but it may also include an activity which may be called quiescent. It has also been held by Hon'ble Madras High Court in a recent case namely CIT v. S.P. Balasubramanian [2001] 250 ITR 127 that even a single adventure in the nature of trade or business is sufficient to constitute trade or business and it is not necessary that there should be a series of transactions before the activities are characterised as a trade or bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion that it is found by the learned CIT (A) that the bank was closed on 31-8-1995 on account of strike as certified by the officials of the concerned bank. From the certificates given by bank officials, the assessee had approached the bank officials with the cheque for the amount of deposit on 30-8-1995. The assessee remained unable to obtain receipt on 31-8-1995 due to bank strike and the cheque was cleared on 1-9-1995. In this view of the situation, it can well be said that the deposit of the assessee was in accordance with the provisions of statute as on the last date i.e. the 31-8-1995, the deposit could not be made due to the reason which was beyond the control of the assessee particularly in view that the efforts were made by the assessee a day prior to last date to deposit the requisite amount in the bank to make him entitle for exemption under section 54F. As mentioned earlier, this position has also been accepted by learned CIT (A). Therefore, we direct the Assessing Officer to allow the necessary exemption to the assessee. 24. Before parting we may observe that section 54F is a beneficial provision to encourage assessee to invest in house properties. Keeping in mind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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