B.M. Kothari, A.M. : This appeal by the assessee is directed against the order of the CIT(A) dated 2-9-1996, for asst. year 1993-94.

2. The assessee has raised various grounds in this appeal but all those grounds relate to the confirmation by the learned CIT(A) of the order passed by the AO holding that the income earned by the assessee on the sale of his property was assessable as business income and not as capital gains declared by the assessee.

3. The appellant is a senior citizen aged bout 70 years and is engaged in social work and journalistic activities. The appellant filed return of income declaring taxable capital gain of Rs. 22,49,750 on the sale property No. 15/1, Sarva Priya Vihar, New Delhi. The appellant booked a plot admeasuring 388.77 sq. yds. in Sarva Priya Vihar Co-operative Housing Society Ltd. in the year 1962 and made aggregate payment of Rs. 40,820.85 on various dates during the year 1962 to 1982 on the following dates :

3.1 The possession of the said plot was received in the year 1982. The assessee thereafter started construction of a residential house on the said plot and incurred a cost of Rs. 3,05,000 during the year 1982 to 1985. The assessee claimed cost of acquisition of the aforesaid property as well as the index cost as per details mentioned below :

3.2 Since the construction of the house could not be completed, the assessee entered into an agreement with a builder, namely, B.K. Uppal vide agreement dated 30-10-1991. According to the said agreement, the appellant became entitled to receive a sum of Rs. 13 lakhs from the said builder as per clause 8 of the said agreement in the following manner :

Non-Refundable

3.3 Apart from the aforesaid sale consideration of Rs. 13 lakhs, the appellant was also entitled to share in the building to be reconstructed by the builder as per clause 6 of the said agreement. Clause 6 of the said agreement provides that builder shall construct the property on the aforesaid land and the share in the constructed building allotable to the owner and the builder was defined as under :

Owner’s share

Basement

Ground Floor

Terrace (rear half)

Builder’s share

First Floor

Second Floor

Terrace (front half)

3.4 After the building was constructed, the assessee sold the constructed portion allotted to him as per details mentioned below :

3.5 The assessee thus received a total sum of Rs. 32 lakhs by way of sale proceeds of the said property. Out of the aforesaid sale consideration, the assessee deducted Index Cost of acquisition at Rs. 7,25,250. Thus total capital gains of Rs. 24,74,750 was disclosed by him. Out of the said amount, the assessee utilised a sum of Rs. 2,25,000 for purchase of a residential flat No. C-I-T, Delhi Police Apartments, Mayur Vihar, Phase-I, New Delhi-110091, in December, 1991: The net taxable capital gain was thus declared at Rs. 22,49,750. The assessee did not purchase or sell any other pro