Land sales profits taxed as business income due to profit intent. Court overturns Tribunal decision.

The court determined that profits from the sale of building sites were taxable as business profits for the assessment years 1964-65 and 1965-66. Despite the assessee's agricultural background and lack of prior property sales, the court found the intention to make a profit evident based on the nature and location of the land. The court disagreed with the Tribunal's assessment, classifying the transactions as business dealings. The judgment favored the Revenue in both assessment years, denying the assessee's claims.

---

---

Issues involved:
The judgment addresses the issue of whether profits from the sale of building sites in specific survey numbers were derived from an adventure in the nature of trade and thus taxable as business profits for the assessment years 1964-65 and 1965-66.

Details of the Judgment:

Assessment Year 1964-65:
- The assessee obtained a permanent lease for two lands and sold plots during the relevant year.
- Initially, the Income-tax Officer treated the sale proceeds as business income due to the intention to make a profit.
- The Appellate Assistant Commissioner upheld this decision but allowed a reduction in business profit for stamp duty and registration fees.
- The Income-tax Appellate Tribunal overturned the decision, stating the transactions were not adventures in the nature of trade.
- The Tribunal disregarded the affidavit filed by the assessee in another case challenging property tax, as it was made to avoid tax liability.
- The Tribunal also noted the absence of permission for land conversion when the agreement with a business corporation was made.
- The Tribunal highlighted the assessee's status as an agriculturist and lack of prior property sales.
- Referring to relevant case law, the court emphasized that the intention at the time of acquiring the leasehold rights was crucial in determining if the transaction was a trading venture.
- The court analyzed the affidavit filed by the assessee, where he clearly stated his intention to sell the plots as building sites.
- The court disagreed with the Tribunal's conclusion and held that the nature and location of the land indicated the intention to make a profit, thus classifying the transactions as business dealings.

Assessment Year 1965-66:
- The judgment for this year followed a similar pattern as the previous year, with the court ruling in favor of the Revenue based on the same reasoning and evidence presented.

Conclusion:
- The court answered the question in each reference in the negative, supporting the Revenue's stance.
- No costs were awarded in the circumstances of the case.

---