Investment land sales taxed as capital gains where Revenue failed to prove a trading intent at acquisition.

Surplus on sale of land was taxable as capital gains, not business income, because the land had been acquired decades earlier as an investment and not with an intention to trade. The absence of fresh commercial purchases, improvements to facilitate resale, or other indicia of a trading venture, together with the long holding period and sales driven by encroachments and litigation, showed no adventure in the nature of trade. The Revenue failed to establish a trading design at inception or any clear commercial character in the disposals, so the capital gains treatment was upheld.

---

---

Issues: Whether the surplus arising on sale of land was assessable as business income or as long-term capital gains.

Analysis: The land had been acquired decades earlier as an investment and not with any established intention to trade. There were no fresh purchases in the ordinary commercial sense, no improvements to make the land more readily saleable, and the later sales were prompted by encroachments, litigation, and the need to protect the corpus. The one-sided character of the disposals, the long period of holding, and the absence of material facts showing a trading design at inception distinguished the case from authorities relied upon by the Revenue. On the totality of circumstances, the Revenue failed to show that the transactions were adventures in the nature of trade.

Conclusion: The surplus was correctly treated as capital gains and not as business income, in favour of the assessee.

Ratio Decidendi: For land acquired as investment, the character of later sales does not become trading income unless the Revenue establishes an intention to trade at the time of purchase or other clear indicia of a commercial venture.

---