Income Tax: Capital Gains vs Business Income - Dispute Alert!

Me and my friend are at loggerheads over this MCQ. Here's the question and our arguments:

Question: X buys a house at ₹10 lakhs and sells it after a year at ₹20 lakhs. What is the nature of this income for tax purposes?

My Argument (Arjun Singh): It's a long-term capital gain (LTCG). No income from business or profession is involved. The gain is purely on account of increase in market value.

My Friend's Argument (Rohan Sharma): It's a business income. If X is buying and selling houses as a business, then the profit is taxable as business income, not capital gain. We can't assume it's a one-time transaction.

What's the right answer? Help us settle this dispute!