BACHITTAR SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Tribunal has referred the following question under s. 256 (1) of the IT Act, 1961 for opinion of the Court :

(2.) THE case has a chequered history and it is not necessary to give the facts. The question relates to the profit derived from the purchase and sale of some land. The ITO was of the opinion that the transaction regarding purchase and sale of the land by the assessee amounted to an adventure in the nature of trade. Consequently, he added the income of profit from the said transaction to the total income of the assessee as business income. The assessee went up in appeal before the AAC, who affirmed the order of the ITO and dismissed the same. Against that judgment, he went up in appeal before the Tribunal. In the appeal, a difference of opinion arose between the Accountant Member and the Judicial Member. The Accountant Member came to the conclusion that the income was agricultural income and thus was not liable to tax. He did not advert to this aspect of the matter. The Judicial Member was to the opinion that the transaction was an adventure in the nature of trade, that the income was not agricultural income and, therefore, it was liable to tax on both counts. As there was difference of opinion between the two members, the matter was referred to the third Member. He affirmed the view of the Judicial Member that it was not an agricultural income. He, however, did not give any finding regarding the matter as to whether the transaction was an adventure in the nature of trade. In view of the opinion of the third member, the Tribunal dismissed the appeal vide its order dt. 29th Aug., 1975. On an application by the assessee under s. 256 (1) of the Act, the above-mentioned question was referred for the opinion of this Court.