BEAUMONT, C.J. - This is a reference made to us by the Commissioner of Income tax under Section 66 (2) of the Act. The substantial questions raised and the only question which has been argued before us is whether the assessee is carrying on business in relation to the purchase and sale of certain land and is liable to be assessed in respect of the profits of that business. The actual question which the Commissioner has raised goes a good deal beyond that but this is the substantial question raised and the only question which we are prepared to answer on the materials put before us.
The material facts are that in the year 1930 the assessee purchased the Inam village of Sahijpur Bogha which is about 3 1/2 miles from Ahmedabad at a price of approximately Rs. 60,000. He borrowed the whole of that amount at 7 1/2 per cent. interest. The village comprised 1,330 acres and out of that area he proceeded to set aside for development and sale as building sites an area of 266 acres divided into 1,000 plots. The finding of fact is that he has incurred some expense on the development of that property. Out of 266 acres which he proposes to develop 36 acres have been set aside for roads and it has been held by the Ahmedabad Court that 70 acres cannot be dealt with as non-agricultural land. We are told that that decision is under appeal. Presumably the difficulty is that tenants have been held to have permanent rights of tenancy which may very well be the case in an inam village. So that, in the result the assessee is only proposing to develop 160 acres. During the year of assessment (1936-37), he actually sold 208 plots comprising 41 acres and 27 gunthas; and during the next year he sold 111 more plots. In connection with the development of this property he has constructed a well at a cost of Rs. 1,100 and has spent Rs. 4,000 in surveying the property and laying out a scheme of development. But apparently the actual development will mostly be done by the purchasers. Now, in these circumstances it is argued by the assessee that there is no business of buying and selling of land; that all that has happened is that the assessee purchased this estate in 1930 and sold a part of it in 1936 and is proposing to sell some but he is not carrying on in sense the business of buying and selling land.
The question whether he is carrying on business or not is a question of fact on which we cannot interfere with the finding of the Commissioner and the Commissioner has found as a fact that the assessee is carrying on business. It seems to us impossible to say that there is no evidence on which that finding of fact can be justified. It is difficult to suppose that the assessee borrowed money at 7 1/2 per cent. interest if he was merely desiring to purchase this inam village as an investment. However it is not for us to consider whether any finding of fact by the Commissioner is rights. We must accept it provided there is any evidence to support is and so far as the Commissioners finding deals with the question of fact whether the assessee was carrying on business we think that there is evidence to support it. But the actual question referred to us by the Commissioner is 'whether there is any evidence to support the finding of the Assistant Commissioner that the said amount of Rs. 47,533 is profit earned by the assessee in the business of purchasing developing and selling land carried on by him.' That figure of Rs. 47,533 was the figure arrived at by the Assistant Commissioner in appeal as profit earned by the assessee in the year of assessment by the sale of 208 plots. The figure was reduced by the Assistant Commissioner from the sum of Rs. 56,980 at which the Income-tax Officer had assessed the assessee. Now it appears to us that the question whether the assessee was properly assessed at this figure is largely a question of law. On the materials put before us we are certainly not prepared to accept that view that the figure in question profits. It is to be noted that the whole transaction is not yet complete which distinguishes this case from the various other cases which have been cited in which there has been a purchase of property or goods and a subsequent said and the Court held that the transaction amounted to carrying on business. But we were not referred to any case in which only a part of the property had been sold whilst the rest remained in the hands of the assessee and might result in a loss. Moreover we have no materials on which we can say that the basis on which the Assistant Commissioner arrived at this figure is a correct basis. All we can do is to answer the pure question of fact and we must amend the question as follows :-
'Whether there is any evidence to support the finding of the Assistant Commissioner that the profit, if any, made on the sale and purchase of the Shahijpur Bogha Village or any part thereof is profits earned by the assessee in the business of purchasing developing and selling land carried on by him ?'
And we answer that question in the affirmative. Beyond that we are not prepared to go.
KANAI, J. - The question referred by the Commissioner divides itself into two parts. The first is whether there is any evidence to support the finding of the Assistant Commissioner that the amount of Rs. 47,533 is profit earned by the assessee. The Second is whether there is any evidence to support the finding of the Assistant Commissioner that the assessee is carrying on the business of purchasing, developing and selling land.
Taking the second question first the Court is not asked and it is no part of the Courts duty to determine whether on the evidence on record the Court itself would come to the conclusion that the assessee was carrying on the business of purchasing, developing and selling land. The Courts duty is to ascertain whether there is any evidence to support the finding of fact recorded by the Assistant Commissioner. On this point our attention has been drawn to the fact that the assessee purchased the land in 1930 and borrowed the whole amount to pay the purchase price at 7 1/2 per cent. interest. Four years late he prepared a scheme for development of 266 acres out of the whole area and plotted out 1,000 plots. It is stated in the case that the scheme for putting up a market, school, clock-tower etc., and for laying out roads was considered and determined by a Committee. The assessee has in fact sold 208 out of 1,000 plots in the assessment year. The question therefore is whether these facts constitute evidence on which the Assistant Commissioner can come to the conclusion as he has done. We are unable to say that there is no evidence in support of that finding. That part of the question should be answered in the affirmative.
The first part of the question is whether there is profits in the business of purchasing and selling this land and if so Rs. 47,533 is the amount as mentioned by the Assistant Commissioner. We are not prepared to answer it. The reason is that proceeding on the footing that this is an adventure in the nature of trade the profits can be ascertained normally when the adventure comes to an end. The figures mentioned in the order of the Assistant Commissioner clearly disclose that he has taken Rs. 68 per acre for the non-developed area as a hypothetical figure. The cases to which our attention has been drawn show that when there is a single venture, i.e., a single transaction which is treated as having been entered into in the nature of trade the question of assessing the profits arose when the venture came to an end i.e., when the goods purchased were all sold. It is admitted here that about three-fourths of the area originally purchased is still there. Under the circumstances it is not possible for the Court to state on the materials put before us whether there is any profit and if so whether the amount of Rs. 47,533 is the profits as mentioned in the question. That part of the question therefore is not answered. I agree with the Chief Justice that the amended question should be answered as stated in his judgment.
Per Curiam : There will be no order as to costs.