COMMISSIONER OF INCOME TAX Vs. SURESH CHAND GOYAL

JUDGEMENT

(1.) THIS judgment shall govern the disposal of the aforesaid Misc. Appeals as the similar question is involved in all the aforesaid Misc. Appeals.

(2.) REVENUE has filed these appeals under Section 260-A of the income Tax Act aggrieved by a common order passed by I. T. A. Nos. 1979,1980 and 1981/del/1995, on 11-9-2002.

(3.) FACTS of the case are that the respondent has income from sale of property, agriculture income and income from sale of general goods in the name and style of M/s. Quality General Stores, Sadar Bazar, Guna. The respondent had been adopted by Smt. Mishri Bai and as the adoption matters were referred to the Court, she had decided to gift him some agricultural land vide gift deed dated 2-9-74. The dispute later on was cleared in favour of the respondent. The respondent thereafter took steps for getting this agricultural land received in gift to be diverted for non-agricultural purposes. This effort was started in 1982 and diversion order was received in 1986. Thereafter the land was converted into the plots. As many as 40 plots were carved out in the name of Goyal Colony. The assessing Officer noted that apart from the approval of map, deposit of tax and other activities for developing them into the plots like making of roads etc. was also taken up and in two out of three assessment years, expenditure has been claimed for such developmental activity. It was also claimed before the AO that in the same area the respondent had reserved part of land for his own use and it could be said that the activity of selling these plots in different numbers in the different assessment years were an activity which could be taken to the category of 'adventure in the nature of trade' and A. O. concluded the matter against assessee. The CIT (A) considering the location of the land, its diversion from agricultural to non-agricultural use and the improvement of the whole town of guna and the Industrial activities around Gwalior and Bhopal, found that the activity of the assessee in dividing the land into plots and not selling it as a single unit went to indicate that he was carrying on business in real property and it was a business venture. The intention of the assessing was also gathered from his various other activities like 'leveling of the land, development of road and drainage' and considering all aspect of the matter, the CIT (A) upheld the order of the AO that the activity of the respondent was in the nature of adventure in trade and business.