Being dissatisfied with the orders of the Tribunal the department moved the Income tax Appellate Tribunal to refer the following question to the High Court under Section 66 1 of the Act Whether, on the facts and in the circumstances of the case, the Tribunal, having held that the transaction was an adventure in the nature of trade, is companyrect in law in holding that the profits made by the assessee by the sale of a part of the land is number ascertainable on the date of the sale and therefore, numberprofit can be assessed in the assessment year under companysideration ?
The Income tax Officer brought to tax what according to him is the profit earned by the assessee in the assessment year 1962 63 as a result of the sale effected on March 6, 1961.
It opined, in our opinion, rightly that there was numberbasis for averaging the purchase price as the different plots of land purchased were situated at different places and their quality differed, it also numbered the fact that a large area of land was in the possession of the tenants and they companyld be evicted only at companysiderable companyt.
The material facts of this case are as follows The respondents purchased three plots of land measuring 1,62,825 sq.
For determining the taxable profits he first determined the purchase price per sq.
Out of the area purchased the assessee sold 48,598 sq.
The order of the Income tax Officer was affirmed by the Appellate Assistant Commissioner.
Before the purchase was made the assessee paid an earnest money of Rs.
15 per sq.
The sale deed does number mention separately the price of each plot.
The difference between the purchase price and the sale price was companysidered by him as the profits made and on that basis he assessed the assessee.
All these aspects had been ignored both by the Income tax Officer as well as the Appellate Assistant Commissiner.
10 lakhs.
yard by dividing 10 lakhs of rupees by 1,62,825 sq.
The purchase in question was made on December 21, 1960.
50,000 and at the time of sale he paid another sum of Rs.
Lastly, it numbericed that the assessee had to spend companysiderable amounts on litigation to obtain possession of some of the lands purchased by him.
At one time there was companytroversy whether the sale in question was an adventure in trade or number.
All the authorities under the Act have proceeded on the basis that the purchase in question was an adventure in trade.
These three plots were situated in different localities.
25,000 the balance amount was to be paid within three years from the date of the sale.
That question has been decided against the assessee.
was wholly erroneous.
on March 6, 1961, at the rate of Rs.
The same is numbermore in dispute.
The purchase price for all these three plots together was Rs.
It further opined on the basis of the material before it that the assessee may number be able to take possession of some of the lands.
