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Judgment
By this application u/s 256(2) of the Income Tax Act, 1961, the Revenue seeks a direction to the Income Tax Appellate Tribunal to refer to this court the following question, in respect of the assessment year 1992-93, for opinion :
"On the facts and in the circumstances of the case, whether the Income Tax Appellate Tribunal was justified in holding that the assessed did not enter into any adventure in the nature of trade and thereafter allowing the claim of the assessed and chargeability of the assessor�s income to capital gain and allow ability for exemption u/s 54E of the Income Tax Act ?"
Having heard learned counsel for the parties we are of the view that the question proposed is not one of law fit for reference to this court.
Though it is true that the question whether profit in a transaction has arisen out of adventure in the nature of trade is a mixed question of law and fact but it is equally well-settled that the expression "adventure in the nature of trade" postulates the existence of certain elements in the adventure, which in law would invest it with the character of trade or business. Further, the question whether the transaction is an adventure in the nature of trade has necessarily to be determined in the light of the cumulative effect of the entire set of facts to be gathered from the relevant material brought on record.
In the present case, while holding that the assessed entering into an agreement with the builder to get the multi-storeyed residential units constructed on the plot of land where a single-storeyed house, occupied by the assessed since 1973, existed up to 1989, did not constitute an adventure in the nature of trade, the Tribunal has observed that the entire exercise undertaken by the assessed was for realisation of a capital asset; the intention at the time of purchase of the house ; his contemporaneous conduct and the circumstances peculiar to the assessor�s case left no room for doubt that the transaction resulted only in capital gains. These facts, found by the Tribunal, are not sought to be challenged by the Revenue in the proposed question.
Accordingly the petition is dismissed.