The main legal point established in the judgment is the significance of the initial intention of the purchaser, subsequent events, and the conduct of the assessee in determining whether a transaction amounts to an adventure in the nature of trade.

( 1 ) AT THE INSTANCE OF THE REVENUE, THIS COURT VIDE order DATED 23. 08. 1991, DIRECTED THE TRIBUNAL TO STATE the CASE AND TO REFER THE FOLLOWING QUESTION:-

"whether ON THE FACTS AND IN THE CIRCUMSTANCES OF THE case, THE TRIBUNAL WAS RIGHT IN HOLDING THAT THERE WAS NO adventure IN THE NATURE OF TRADE AND THEREBY DELETING business INCOME OF RS. 11,87,387/- FROM THE INCOME OF THE assessee?"

( 2 ) THE REVENUE HAD EARLIER MOVED THE INCOME-TAX appellate TRIBUNAL UNDER SECTION 256 (1) OF THE INCOME- tax ACT, 1961 (HEREINAFTER REFERRED TO AS the ACT ) AND the SAID APPLICATION WAS REJECTED. HENCE, THE REVENUE approached THIS COURT AND IN VIEW OF THE ORDER MADE BY this COURT, THE PRESENT REFERENCE IS PLACED BEFORE THE court.

( 3 ) THE ASSESSEE IS AN INDIVIDUAL AND WAS DERIVING income AT THE RELEVANT TIME FROM MONEY-LENDING BUSINESS. THE ACCOUNTING YEAR ENDED IN QUESTION ON 31. 03. 1983. THE assessee VIDE SALE DEED DATED 25. 07. 1958 FOR RS. 21,021/- had ACQUIRED A PLOT OF LAND ADMEASURING 2130. 459 SQ. MTRS. OR 2548 SQ. MTRS. BEARING NO. C-1/2, MODEL TOWN, NEW delhi-110009, FORMERLY KNOWN AS VILLAGE MALAKPUR CHHAONI within THE LIMITS OF DELHI MUNICIPAL CORPORATION. IT MAY be NOTED THAT THE URBAN LAND (CEILING AND REGULATION) act, 1976 CAME INTO FORCE AND, THEREFORE, UNDER THE provisions CONTAINED IN THE SAID ACT, SHE COULD NOT HAVE held MORE THAN 500 SQ. MTRS OF LAND AND, THEREFORE, SHE approached THE LIEUTENANT GOVERNOR UNDER SECTION 21 (1) B of THE SAID ACT, TO ENABLE HER TO HOLD EXCESS VACANT land. HOWEVER, THE SAID APPLICATION WAS REJECTED ON 18. 05. 1979. THEREAFTER, ON ANOTHER APPLICATION, INTER alia, STATING THAT SHE IS INTERESTED TO CONSTRUCT GROUP housing ON THE SAID PLOT, KEEPING IN VIEW THE GUIDELINES issued BY THE DELHI ADMINISTRATION VIDE ORDER NO. 36 (3)/8/landb/ulcr DATED 16. 10. 1978, ON THE BASIS OF THE provisions CONTAINED IN THE ACT AS WELL AS THE notifications, EXEMPTION WAS GRANTED BY THE DELHI administration VIDE ORDER DATED 15. 01. 1982 FOR THE purpose OF CONSTRUCTION OF GROUP HOUSING SCHEME ON THE plot IN QUESTION, SUBJECT TO THE CONDITIONS SPECIFIED therein. AFTER EXEMPTION, GRANTED AS AFORESAID, THE assessee ENTERED INTO AN AGREEMENT ON 15. 01. 1982 WITH M/s bhasin PROPERTIES, H3/12 MODEL TOWN, DELHI THROUGH ITS partner, SHRI OM PRAKASH BHASIN. CLAUSE 3 OF THE agreement BEING RELEVANT IS REQUIRED TO BE REPRODUCED hereunder:- " (3) THE ASSESSEE WAS TO BE PAID BY THE BUILDER and promoters RS. 20 LAKHS FOR THE SAID PLOT OF LAND IN THE manner DETAILED BELOW:- i) RS. 3 LAKHS AS ADVANCE MONEY ON THE EXECUTION and SIGNING OF THIS AGREEMENT; ii) RS. 12 LAKHS WITHIN AN AGREED PERIOD OF 200 DAYS from THE DATE OF EXECUTION OF THE AGREEMENT AND AS A security MEASURE THE ASSESSEE WAS TO RETAIN 1000 SQ. YDS. (836. 13 SQ. METRES) AREA IN HER POSSESSION WHICH WAS TO be RELEASED AND HANDED OVER TO THE BUILDER and PROMOTER ON payment OF THE ABOVE SUM OF RS. 12 LAKHS. THE REMAINING area IN HER POSSESSION WAS TO BE RELEASED BY THE ASSESSEE to THE BUILDER and PROMOTER FOR DEVELOPMENT AND construction; iii) THE BALANCE OF RS. 5 LAKHS WAS TO BE PAID BY THE builder and PROMOTER TO THE ASSESSEE WITHIN A PERIOD OF 24 months OR ON THE COMPLETION OF THE CONSTRUCTION AND ON the DATE OF REGISTRATION OF THE SALE DEEDS OF THE FLATS in FAVOUR OF PROSPECTIVE BUYERS. (CLAUSE3 ). "

( 4 ) INITIALLY, THE AMOUNT OF RS. 3 LAKHS AS ADVANCE money WAS PAID ON 15. 01. 1982. HOWEVER, THE ASSESSEE WAS not TAXED ON THAT. THE SECOND INSTALLMENT OF RS. 12 lakhs WAS PAID DURING THE ASSESSMENT YEAR 1983-84 ON TWO different DATES, I. E. , RS. 10 LAKHS ON 14. 04. 1982 AND RS. 2 LAKHS ON 25. 11. 1982. THE ASSESSING OFFICER HELD THAT - "the ASSESSEE IS STILL THE OWNER OF THIS PLOT OF LAND and BY VIRTUE OF ALLEGED AGREEMENT SHE HAS THROWN THIS land TO HER BUSINESS ASSET. IT HAS ALSO COME TO LIGHT that THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS. 3 LAKHS ON 15. 01. 1982 AND IN THE YEAR 1982-83 IN ALL A SUM OF RS. 12 lakhs WAS RECEIVED". IT IS IN VIEW O