COMMISSIONER OF INCOME TAX Vs. NATHALAL DAHYABHAI

JUDGEMENT

(1.) THE familiar dilemma presents itself again : Is the excess sum realised by an assessee on the sale of land merely a gain on account of the enhancement of value of a capital asset or is it a profit made in the operation of business by the sale of an item of the stock -in -trade.

(2.) THE assessee is a registered partnership firm which carries on business of money -lending. It also derives income by way of dividend and from investment in property. The assessment year is 1969 - 70, the relevant previous year being Samvat year 2024.

(3.) IT appears that the assessee had purchased 7,422 sq. yds. of land at Vadaj in S. Y. 2007. The said land was sold by the assessee in S.Y. 2024. According to the assessee, the sale resulted in a profit of Rs. 12,365. The assessee had also purchased another piece of land admeasuring 5,610 sq. yds. situate at Sabarmati jointly with one Ratilal Panachand on 24th Sept., 1956 (S.Y. 2012). A portion of the said land admeasuring 2,077 sq. yds. was also sold in S. Y. 2024. According to the assessee, the said sale resulted in a profit of Rs. 36,475.