1975 (12) TMI 42

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.... per sq. yard. On the 16th of February, 1959, that land was sold by the firm at a price which resulted in a profit of Rs. 46,876. Shortly thereafter, it purchased a plot of land at Rajkot for an amount a little less than the price at which it had sold the Ghatkopar land. The assessee-firm's case was that its object in purchasing the land at Ghatkopar was to construct houses for the partners themselves, but later on it was realised that the locality was unhealthy, and the firm, therefore, sold the Ghatkopar land and purchased the land at Rajkot, which was the native place of the partners, in order that they should construct their own houses there. The Income-tax Officer rejected that contention of the assessee and held that the purchase and ....

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....de ? " In G. Venkataswami's case [1959] 35 ITR 594 (SC) which has been cited by the Tribunal, Gajendragadkar J., speaking for the court, laid down (at page 609) that in deciding the character of such transactions, several factors are treated as relevant, viz. : (1) Whether the purchaser was a trader and whether the purchase of the commodity and its resale were allied to his usual trade or business, or an activity incidental to it ; (2) The nature and quantity of the commodity purchased and resold ; (3) Whether the purchaser had, by any act subsequent to the purchase, improved the quality of the commodity in order to-make it more readily re-saleable ; (4) The incidents associated with the purchase and resale ; (5) Whether t....

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....ning to the facts of the present case, in the light of these principles laid down by the highest court, there can, in my opinion, be no doubt that the Tribunal's view is correct. First and foremost, it must be borne in mind that the property in question in the present case is land which, as observed by the Supreme Court in Janki Ram's case [1965] 57 ITR 21 (SC), is not ordinarily a commercial commodity. Secondly, the resale of the said land took place a little over six years after the purchase which would militate against any inference being drawn that the purchase itself had been made with the intention of embarking on a venture in the nature of trade. Thirdly, the purchase of the Rajkot property must be viewed in the context of the fact t....