Capital gains treatment for developed plots received on compulsory acquisition depends on the totality of facts, not trading intent.

Receipt and later sale of developed plots obtained in lieu of compensation for compulsorily acquired inherited agricultural land was treated as realisation of capital value rather than an adventure in the nature of trade. The character of the transaction depended on the totality of the facts, including that the land was inherited and not purchased, and that the assessee merely accepted developed plots under the acquisition scheme. Because the Tribunal's conclusion rested on factual appreciation, no referable question of law arose merely from disagreement with that inference, and the reference was not maintainable.

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Issues: Whether the assessee's receipt and subsequent sale of developed plots, arising out of compulsory acquisition of inherited agricultural land, constituted capital gains or profit from an adventure in the nature of trade; and whether any referable question of law arose from the Tribunal's factual findings.

Analysis: The land was inherited and not purchased by the assessee. It was compulsorily acquired, and the assessee merely opted to receive developed plots in lieu of cash compensation under the statutory acquisition scheme. The Tribunal's finding that the transaction was only a realisation of the value of the land and not a trading activity rested on appreciation of the relevant facts and circumstances. In such matters, the character of the transaction depends on the totality of facts, and where the conclusion is factual, no referable question of law arises merely because the Revenue disagrees with that inference.

Conclusion: The transaction was held to give rise to capital gains and not business income from an adventure in the nature of trade, and the reference was held not maintainable as no question of law arose.

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