TaxTMI 
TaxTMI 
2003 (2) TMI 21
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.... agricultural land has been sold in pieces whereas in the case of the assessee developed plots are sold with an intention to earn more profit as mentioned in the statement of facts?" This court had issued notice to the assessee on whose behalf Mr. Sumit Nema, learned counsel has entered appearance. In support of the application, it is submitted by Mr. Rohit Arya, learned counsel for the Revenue, that the Tribunal has erred in law by rejecting the application forming the subject matter of R.A. No. 24/JAB of 1998 contained in annexure P 4 by refusing to refer the aforesaid questions to this court. It is submitted by him that on scrutiny of facts in entirety, it is graphically clear that the assessee had inherited some agricultural land and there was a compulsory acquisition by the Jabalpur Development Authority and the assessee instead of accepting compensation accepted the offer of the Jabalpur Development Authority for acceptance of certain plots and later on sold them phase-wise basis and, therefore, the said transaction conducted by her would come within the ambit and sweep of speculative transaction and by no stretch of imagination categorised as capital gain. It is put forth b....
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....rade it clearly suggests that the transaction cannot properly be regarded as trade or business. It is allied to transactions that constitute trade or business but may not be trade or business itself. It is characterised by some of the essential features that make up trade or business but not by all of them; and so, even an isolated transaction can satisfy the description of an adventure in the nature of trade. Sometimes it is said that a single plunge in the waters of trade may partake of the character of an adventure in the nature of trade. This statement may be true; but in its application due regard must be shown to the requirement that the single plunge must be in the waters of trade. In other words, at least some of the essential features of trade must be present in the isolated or single transaction. On the other hand, it is sometimes said that the appearance of one swallow does not make a summer. This may be true if, in the metaphor, summer represents trade; but it may not be true if summer represents an adventure in the nature of trade because, when, the section refers to an adventure in the nature of trade, it is obviously referring to transactions which individually canno....
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....se of capital accretion and not profit derived from an adventure in the nature of trade. Cases of realisation of investments consisting of purchase and resale, though profitable, are clearly outside the domain of adventures in the nature of trade. In deciding the character of such transactions several factors are treated as relevant. Was the purchaser a trader and were the purchase of the commodity and its resale allied to his usual trade or business or incidental to it? Affirmative answers to these questions may furnish relevant data for determining the character of the transaction. What is the nature of the commodity purchased and resold and in what quantity was it purchased and resold? If the commodity purchased is generally the subject-matter of trade, and if it is purchased in very large quantities, it would tend to eliminate the possibility of investment for personal use, possession or enjoyment. Did the purchaser by any act subsequent to the purchase improve the quality of the commodity purchased and thereby made it more readily resalable? What were the incidents associated with the purchase and resale? Were they similar to the operations usually associated with trade or bus....
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....d and enjoy it if a really high price is not offered. The intention to resell may in such cases be coupled with the intention to hold the property. Cases may, however, arise where the purchase has been made solely and exclusively with the intention to resell at a profit and the purchaser has no intention of holding the property for himself or otherwise enjoying or using it. The presence of such an intention is no doubt a relevant factor and unless it is offset by the presence of other factors it would raise a strong presumption that the transaction is an adventure in the nature of trade. Even so, the presumption is not conclusive; and it is conceivable that, on considering all the facts and circumstances in the case, the court may, despite the said initial intention, be inclined to hold that the transaction was not an adventure in the nature of trade. We thus come back to the same position and that is that the decision about the character of a transaction in the context cannot be based solely on the application of any abstract rule, principle or test and must in every case depend upon all the relevant facts and circumstances." We may remind ourselves at this juncture that we are d....
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.... analyse the present fact situation. On a perusal of the assessment order, it is quite luminescent that she had inherited the land from Smt. Kamla Jaiswal, her mother, who expired on January 18, 1976. Her name was duly mutated in the revenue records in respect of the land in question. The land was acquired by Jabalpur Development Authority which had issued a letter on July 15, 1985, to the assessee proposing allotment of certain plots in consideration of the acquisition of agricultural land. This action is purported to be taken under section 56 of the 1973 Adhiniyam. Thus, it is a compulsory acquisition. The Tribunal in paragraph 6 of its original order has held as under: "6. We have carefully considered the arguments of both the sides and have perused the material placed before us. When a transaction is entered into with the primary or the sole intention of making profit, it would amount to adventure in the nature of the trade. To ascertain the intention of the party, one has to look into the facts and the surrounding circumstances. If on the consideration of all the facts, it appears that the sole intention of the party in purchasing the particular land and selling thereof, was ....