Land development for resale as plots can constitute business income when the transaction shows a profit-making venture.

Acquisition of land with a view to resale after development can constitute a business venture where the surrounding circumstances show a profit-making transaction. Dividing land into plots, developing it to enhance marketability, and selling it in parcels supports treatment of the land as stock-in-trade rather than a mere capital asset. On those facts, the receipts from sale of plots were properly assessed as business income and included in taxable income. A deduction provision intended for expenditure on works of public welfare did not apply to such business receipts.

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Issues: Whether the profit from acquisition, development, plotting and sale of land formed business income and was liable to be included in the assessee's assessable income.

Analysis: A single venture may still amount to trade or business where land is acquired with a view to resale after development. When the land is divided into plots, developed to increase its attractiveness, and sold in parcels rather than as a single unit, the land is treated as stock-in-trade and the activity assumes the character of a business venture. The activities here went beyond mere provision of public amenities or works of welfare, because the acquisition of a large extent of land, its development, and sale of plots showed a profit-making transaction. The deduction provision relating to expenditure on works of public welfare was not applicable to business income.

Conclusion: The receipt from the sale of plots was rightly assessed as business income and included in the assessee's taxable income.

Ratio Decidendi: Acquisition and development of land for resale in plots constitutes business where the surrounding circumstances show a profit-making venture, even if it is a single transaction.

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