ADDITIONAL COMMISSIONER OF INCOME TAX Vs. BHAGWATI PRASAD

JUDGEMENT

(1.) ON February 8, 1960, the assessee, Bhagwati Prasad, his brother, Mata Prasad, his wife and his mother jointly purchased 9 bighas 19 biswas and 8 dhoors of land along with a building, situate in village Tulsipur Mahmoorganj, District Varanasi, for a sum of Rs. 84,061. Subsequently, by two sale deeds dated June 8 and 9, 1966, a total area of 2 bighas 9 biswas and 2 dhoors was sold for a total consideration of Rs. 60,000. For the assessment year 1967-68, the income-tax Officer estimated the original cost of the land sold at Rs. 15,000 and worked out the profit at Rs. 45,000. The assessee's one-fourth share was computed at Rs. 11,250 and this was added to the income of the assessee.

(2.) THE assessee appealed. He attacked the finding that the transaction of purchase and sale of land represented an adventure in the nature of trade. It was stressed that it was a solitary transaction and the assessee was not carrying on the business of buying and selling land. THE firm of which the assessee was a partner carried on business in tobacco and pan masala. THE Appellate Assistant Commissioner accepted the assessee's plea and deleted the addition. THE department went up to the Tribunal but failed. At the instance of the Commissioner, the Tribunal has referred the following question of law for our opinion :