Venkataswami Naidu & Co. v. CIT

35 ITR 594Supreme Court of India1959#765 most cited

What is Venkataswami Naidu & Co. v. CIT authority for?

A transaction is considered an adventure in the nature of trade, constituting business income, if there is a pre-determination to sell an asset at a profit. Conduct prior to purchase, as well as subsequent improvements, are relevant in determining the character of the transaction.

133

judgments rely on this decision, according to BharatTax’s citation analysis of 367,518 Indian tax judgments — from 2008 to 2026.

Also referred to as

Venkataswami Naidu & Co. v. CIT · 35 ITR 594 · adventure in the nature of trade · business income · profit on sale of land · pre-determination to sell · isolated transaction · capital gains · section 45

Sections most often in play

Section 143(3)Section 133(6)Section 45Section 131Section 142(1)Section 147Section 148Section 44AD

Issues it is cited on

transfer of capital assetsection 45short term capital gainlong term capital gainsection 28previous yeartransferincome from other sourcesbusinesscompanysection 142(1)section 143(2)

Judgments citing Venkataswami Naidu & Co. v. CIT

DCIT, Tambaram vs. R.Vsanthi Ram Narayan, Chennai

In the result, all the appeals of the Revenue and cross- objections of the assessee stand dismissed

ITA 1805/CHNY/2015[2009-10]Status: DisposedITAT Chennai18 Dec 2015AY 2009-10

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita Nos.1802 & 1803/Mds/2015 & C.O. Nos.114 & 115/Mds/2015 (In I.T.A. Nos.1802 & 1803/Mds/2015) "नधा"रण वष" / Assessment Years : 2008-09 & 2009-10

For Appellant: Sh. P. Radhakrishnan, JCIT
Section 148

…taken as income from business by the Assessing Officer. The Assessing Officer by applying the judgments of Apex Court in Raja J. Rameswar Rao v. CIT (42 ITR 179), Indramani Bai & Another v. Addl. CIT (200 ITR 594) and in G. Venkataswami Naidu & Co. v. CIT (35 ITR 594), found that the profit on sale of land has to be treated as business income. Accordingly, he rejected the claim of the assessee to assess the income on sale of land as long term capital gain. However, on appeal by the assessee, the CIT(Appeals) found that on identical set of facts in the case of Shri S. Vasanthakumar in I.T.A. No.1491/Mds/2010…

DCIT, Tambaram vs. R.Vasanthi Ram Narayan, Chennai

In the result, all the appeals of the Revenue and cross- objections of the assessee stand dismissed

ITA 1804/CHNY/2015[2008-09]Status: DisposedITAT Chennai18 Dec 2015AY 2008-09

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita Nos.1802 & 1803/Mds/2015 & C.O. Nos.114 & 115/Mds/2015 (In I.T.A. Nos.1802 & 1803/Mds/2015) "नधा"रण वष" / Assessment Years : 2008-09 & 2009-10

For Appellant: Sh. P. Radhakrishnan, JCIT
Section 148

…taken as income from business by the Assessing Officer. The Assessing Officer by applying the judgments of Apex Court in Raja J. Rameswar Rao v. CIT (42 ITR 179), Indramani Bai & Another v. Addl. CIT (200 ITR 594) and in G. Venkataswami Naidu & Co. v. CIT (35 ITR 594), found that the profit on sale of land has to be treated as business income. Accordingly, he rejected the claim of the assessee to assess the income on sale of land as long term capital gain. However, on appeal by the assessee, the CIT(Appeals) found that on identical set of facts in the case of Shri S. Vasanthakumar in I.T.A. No.1491/Mds/2010…

DCIT, Tambaram vs. Shridi Estates, Chennai

In the result, all the appeals of the Revenue and cross- objections of the assessee stand dismissed

ITA 1803/CHNY/2015[2009-10]Status: DisposedITAT Chennai18 Dec 2015AY 2009-10

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita Nos.1802 & 1803/Mds/2015 & C.O. Nos.114 & 115/Mds/2015 (In I.T.A. Nos.1802 & 1803/Mds/2015) "नधा"रण वष" / Assessment Years : 2008-09 & 2009-10

For Appellant: Sh. P. Radhakrishnan, JCIT
Section 148

…taken as income from business by the Assessing Officer. The Assessing Officer by applying the judgments of Apex Court in Raja J. Rameswar Rao v. CIT (42 ITR 179), Indramani Bai & Another v. Addl. CIT (200 ITR 594) and in G. Venkataswami Naidu & Co. v. CIT (35 ITR 594), found that the profit on sale of land has to be treated as business income. Accordingly, he rejected the claim of the assessee to assess the income on sale of land as long term capital gain. However, on appeal by the assessee, the CIT(Appeals) found that on identical set of facts in the case of Shri S. Vasanthakumar in I.T.A. No.1491/Mds/2010…

DCIT, Tambaram vs. Shridi Estates, Chennai

In the result, all the appeals of the Revenue and cross- objections of the assessee stand dismissed

ITA 1802/CHNY/2015[2008-09]Status: DisposedITAT Chennai18 Dec 2015AY 2008-09

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita Nos.1802 & 1803/Mds/2015 & C.O. Nos.114 & 115/Mds/2015 (In I.T.A. Nos.1802 & 1803/Mds/2015) "नधा"रण वष" / Assessment Years : 2008-09 & 2009-10

For Appellant: Sh. P. Radhakrishnan, JCIT
Section 148

…taken as income from business by the Assessing Officer. The Assessing Officer by applying the judgments of Apex Court in Raja J. Rameswar Rao v. CIT (42 ITR 179), Indramani Bai & Another v. Addl. CIT (200 ITR 594) and in G. Venkataswami Naidu & Co. v. CIT (35 ITR 594), found that the profit on sale of land has to be treated as business income. Accordingly, he rejected the claim of the assessee to assess the income on sale of land as long term capital gain. However, on appeal by the assessee, the CIT(Appeals) found that on identical set of facts in the case of Shri S. Vasanthakumar in I.T.A. No.1491/Mds/2010…

Shanti Banerjee vs. Dy. Commissioner of Income Tax

The appeal is allowed but in the circumstances with

ITA - 299 / 2003HC Delhi17 Nov 2015
Section 45Section 54

…n agreement with the Builder, the Assessee had undertaken an ‘adventure’ in the nature of trade warranting the receipt to be treated as business income. 11. The issue, it appears, is no longer res integra. In G. Venkataswami Naidu and Co. v. CIT [1959] 35 ITR 594, the Supreme Court observed that while a single "plunge" in the waters of trade may be enough, a mere purchase of property "if that is all that is involved in the plunge may fall short of anything in the nature of trade". It was emphasised that what might be in the nature of trade would depend on the facts and circumstances of a particular c…

SHANTI BANERJEE (deceased) by LRs vs. Dy. Commissioner of Income Tax

The appeal is allowed but in the circumstances with

ITA/299/2003HC Delhi17 Nov 2015
Section 45Section 54

…n agreement with the Builder, the Assessee had undertaken an ‘adventure’ in the nature of trade warranting the receipt to be treated as business income. 11. The issue, it appears, is no longer res integra. In G. Venkataswami Naidu and Co. v. CIT [1959] 35 ITR 594, the Supreme Court observed that while a single "plunge" in the waters of trade may be enough, a mere purchase of property "if that is all that is involved in the plunge may fall short of anything in the nature of trade". It was emphasised that what might be in the nature of trade would depend on the facts and circumstances of a particular c…

ITO, Bangalore vs. M/S Telestar Investments Pvt. Ltd., Bangalore

In the result, the revenue’s appeal is dismissed

ITA 1375/BANG/2011[1997-98]Status: DisposedITAT Bangalore24 Jul 2015AY 1997-98

Bench: Smt. P. Madhavi Devi & Shri Abraham P Georgeincome-Tax Officer, Ward 12(2), Bangalore. … Appellant Vs. M/S.Telestar Investments Pvt. Ltd. No.314, Raheja Arcade, Koramangala, Bangalore. … Respondent Pan:Aaact5746M

For Appellant: Shri P. Dhivahar, JCIT(DR)For Respondent: None
Section 142(1)Section 143(2)Section 143(3)

…t giving any reason as to why he is not accepting the assessee’s contention, has proceeded to make the disallowance by referring to the following decisions: i. Michael A.Kallivayalil vs. CIT (1976) 102 ITR 2002, ii. G.Venkata Swami Naidu & Co. vs. CIT (1959) 35 ITR 594 and iii. Sarder Indra Singh & Sons Ltd. vs. CIT (1953) 24 ITR 415 We find that the AO has not given any reasons for not accepting the assessee’s contention and also as to how these decisions are applicable to the facts of the case before him. Therefore, in our opinion, the CIT(A) has rightly observed that the assessee’s statement that the shares…

Sri Damodarlal Badruka vs. The Income Tax Officer

ITTA/299/2003HC Telangana17 Mar 2015

Bench: A RAMALINGESWARA RAO,DILIP B. BHOSALE

The Commr of Income Tax vs. M/S Nadatur Holdings and Investments Pvt Ltd

The appeal is dismissed

ITA/1400/2006HC Karnataka23 Aug 2012

Bench: B.MANOHAR,K.SREEDHAR RAO

Section 143(1)Section 143(2)Section 260ASection 49(1)(ii)

…ion to buy, invest, acquire and hold the shares. 13 13. The principles underlying the distinction between the capital gain and the business income were examined in G.VENKATASWAMY NAIDU AND COMPANY v/s COMMISSIONER OF INCOME TAX, reported in 35 ITR 594 (SC) wherein the Hon'ble Supreme Court has held “The character of transaction cannot be determined solely on application of any abstract Rule, principle of test must depend upon all the facts and circumstances of the case. Ultimately, it is a matter of first impression with the court whether a particular transaction is in the nature…

Commissioner of Income Tax vs. Dcm Limited

In the result the appeal is dismissed

ITA - 987 / 2007HC Delhi13 Jan 2009

…In this regard, it is relevant to note that the property was held for several years in the Capital Account, that is, since 1967 and was shown in the balance sheet of the assessee as a “capital asset”. The decision in G. Venkataswami Naidu –vs- CIT, (1959) 35 ITR 594 was applied to come to the conclusion that the sale of the property would result in capital accretion and not as profits from trade when such properties are sold. The Tribunal held that the decision to sell the property was necessitated to improve the cash flow of the Assessee. Finally, the decision of the CIT(A) holding that the income of t…

C.I.T vs. D.C.M. Ltd

In the result the appeal is dismissed

ITA/987/2007HC Delhi13 Jan 2009

…In this regard, it is relevant to note that the property was held for several years in the Capital Account, that is, since 1967 and was shown in the balance sheet of the assessee as a “capital asset”. The decision in G. Venkataswami Naidu –vs- CIT, (1959) 35 ITR 594 was applied to come to the conclusion that the sale of the property would result in capital accretion and not as profits from trade when such properties are sold. The Tribunal held that the decision to sell the property was necessitated to improve the cash flow of the Assessee. Finally, the decision of the CIT(A) holding that the income of t…

M/S Hindustand Industrial Reso vs. The Asst. Commissioner of Inco

The appeal is allowed

ITA/1130/2006HC Delhi09 Jan 2009

Bench: The Income Tax Appellate Tribunal Was With Regard To The Treatment To Be Given To The Land Owned By The Assessee Company With The Future Intention Of Setting Up An Industry Thereon. The Said Land Was Acquired Under The Land Acquisition Act, 1894. The Assessing Officer Charged Capital Gains Thereon To The Extent Of Rs 18,57,932/-. The Assessee Has Throughout Maintained That The Land In Question Was Land Falling Within The Definition Of „Agricultural Land‟ Given In Section 2 (14)(Iii) Of The Income Tax Act, 1961 (Hereinafter Referred To As The „Said Act‟). It Was Therefore, Contended By The Assessee That No Capital Gains Could Be Charged In Respect Of The Land.

For Appellant: Mr Rajesh Banati with Mr Hari MohanFor Respondent: Ms Prem Lata Bansal with Mr M. P. Gupta, Mr Sanjeev
Section 2Section 4

…is, according to her, was a distinguishable factor between the present case and the three decisions relied upon by the learned counsel for the appellant/ assessee. She also placed reliance on G. Venkataswami Naidu & Co. v. The Commissioner of Income-tax : 35 ITR 594, wherein the Supreme Court observed that in cases where the purchase had been made solely and exclusively with an intention to resell at a profit and the purchaser had no intention of holding the property for himself or otherwise enjoying or using it, presence of such an intention is no doubt a relevant factor and unless it is offset by the o…

Central Govt.Emp. Consumer Coo vs. Commissioner of Income Tax

Appeal is dismissed and pending applications

ITA/407/2007HC Delhi19 Sept 2008

Bench: HON'BLE MR. JUSTICE BADAR DURREZ AHMED,HON'BLE MR. JUSTICE RAJIV SHAKDHER

Section 35Section 40Section 63Section 8(1)

…CRL.A. 407/2007 Page 1 of 47 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 14th OCTOBER, 2025 IN THE MATTER OF: + CRL.A. 407/2007 ARJUN PATIL .....Appellant Through: Mr. Jaspreet Singh Kapur, Mr. Wasim Ansari and Ms. Shweta, Advocates. versus UOI & ORS .....Respondents Through: Ms. Bharathi Raju, (SPC) with Miss. Divyangi, Advocates for UoI. Mr. Vivek Gurnani, Panel Counsel with Mr. Kanishk Maurya, Advocate for ED.…