N.K. Jain, J.
1. By this application under Section 256(2) of the Income-tax Act, 1961, the applicant--Department seeks a direction to the Income-tax Appellate Tribunal, Indore, to state the case and refer the undernoted questions said to be of law for the opinion of this court, arising out of its order dated July 24, 1991, passed in I. T. A. No. 675/(Ind) of 1987 and its refusal to refer the case by order dated December 18, 1991, passed in R. A. No. 395/(Ind) of 1991 :
' 1. Whether, on the facts and in the circumstances of the case, the land sold by the assessee was agricultural land, the surplus on the sale of which was not chargeable to tax as business income ?
2. Whether, on the facts and in the circumstances of the case, the surplus on the sale of land has not arisen to the assessee from an adventure in the nature of trade ?
3. Whether, on the facts and in the circumstances of the case, the repeated sales and purchases by the assessee in lands is not an adventure in trade and was not enough to come to such a conclusion ?'
Briefly stated, the facts of the case are that during the course of assessment proceeding for the assessment year 1983-84, the Income-tax Officer noticed that the assessee had sold agricultural land for Rs. 35,000 on October 23, 1982, which she had purchased for Rs. 13,961 on March28, 1981. The assesses claimed exemption from income-tax on the sale of this land. The Income-tax Officer on enquiry found that the assessee has been dealing in purchase and sale of lands in the past also. He in his order catalogued these transactions as follows :
1. Purchased land for Rs. 4,000 on 6-6-1967
2. Sold land for Rs. 7,000 on 10-7-1978
3. Sold land for Rs. 7,000 on 10-7-1978
4. Purchased land for Rs. 16,439 on 26-12-1978
5. Purchased land for Rs. 5,500 on 29-1-1979
6. Sold land for Rs. 18,000 on 19-3-1981
7. Purchased land for Rs. 13,961 on 28-3-1981
8. Sold land for Rs, 35,000 on 23-10-1982
9. Purchased land for Rs. 5,801 on 29-9-1982
10. Purchased land for Rs. 33,316 on 25-3-1983.
The Income-tax Officer, vide its order dated December 18, 1985, therefore, held that the transaction in question was in the nature of an adventure in business of purchase and sale of lands and, accordingly, treated the income as income from business and assessed the non-applicant-assessee. The order of the Income-tax Officer was confirmed in appeal by the Deputy Commissioner of Income-tax (Appeals) on February 25, 1987. Consequently, the assessee filed an appeal before the Tribunal. The Tribunal, on the basis of the material on record, came to the conclusion that the assessee was not engaged in the business of lands and relying upon its certain earlier decisions allowed the appeal and negatived the findings of the two authorities below. It, however, observed that the Department may assess the assessee for capital gains. This order dated July 24, 1991, of the Tribunal was not acceptable to the Department which, therefore, filed reference application under Section 256(1) requiring the Tribunal to state the case and refer the aforesaid questions of law to this court. This application was also rejected by the Tribunal by its order dated December 18, 1991, thus giving rise to the present application under Section 256(2).
2. We have heard Shri D. D. Vyas and Shri Bhadang, learned counsel for the applicant-Department, and Shri Kochatta, learned counsel for the non-applicant-assessee.
3. The Tribunal, in its order dated July 24, 1991, inter alia, observed :
' She has purchased agricultural lands situated outside the urban area. She also sold these lands as agricultural lands. The assessee did notunder lake herself either in conversion of agricultural land into non-agricultural land or engaged in division of the lands into plots. The lands in question were assessed to land revenue and according to the certificate of the patwari, the lands were used as agricultural lands, the assessee raised crops thereon. The finding of the Income-tax Officer that the lands in question have never been used as agricultural lands is, therefore, incorrect. The assessee did not establish any business in land. The material placed by the Department does not support the contention of the Department that the assessee was engaged in the business of lands. '
The Tribunal thus concluded : 'the assessee never engaged herself in any systematic business activity in land.' This finding of the Tribunal is obviously based on the appreciation of facts as unfolded by the material on record. It is well-settled that findings of fact based on appreciation of evidence do not give rise to any referable question of law. In the instant case also, we are satisfied that the findings of the Tribunal are findings of fact and do not, therefore, give rise to any referable question of law.
4. The Department's application is, therefore, rejected but without any order as to costs. Counsel's fee Rs. 750 is allowed, for each side, if certified.