Commissioner of Income-tax Vs. Refugee Co-operative Housing Society Ltd. - Court Judgment

Excerpt:
- 1. the petitioner seeks reference of the following question : 'whether, on the facts and in the circumstances of the case, the income-tax appellate tribunal was correct both on facts and in law in directing the assessing officer to treat the income of the society from sale of plots to outsiders under the head 'capital gains' ?' 2. in our opinion, on question of law arises for the simple reason that the respondent was a society which was set up in 1947 for the purpose of rehabilitating the refugees who had come from pakistan. land was allotted to the society by the government and this land was to be distributed amongst the members. subsequently, permission was sought by the society to sell some plots of land to outsiders (non-members) with a view to augment the society's funds because the sales to the members themselves were to be on 'no profit no loss' basis. 3. the tribunal has come to the conclusion that the land in question which was sold to outsiders did not become its stock-in-trade and furthermore there was no profit motive right through the transaction beginning from acquisition of the land. learned counsel for the petitioner has referred to the decision of the bombay high court in the case of cit v. v. a. trivedi : [1988]172itr95(bom) . the principle enunciated in this judgment in fact supports the case of the respondent before us. it was held in trivedi's case : [1988]172itr95(bom) that there has to be an intention to trade at the time of purchase and the onus of establishing it is on the revenue. in the present case, the purchase was made in 1947 and we are concerned here with sales in the previous years relevant to the assessment year 1975-76 and 1976-77, that is to say, nearly 27 or 28 years after the purchase of land. 4. in our opinion, no question of law arises and this petition is dismissed. 5. there will, however, be no order as to costs.