TMI Blog1961 (7) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. It is not in dispute that the items of real property so allotted had been acquired by the larger family in the course of its money-lending transactions and in the hands of that family had formed part of the stock-in-trade of the money-lending business. During the account years relevant to the assessment years 1948-49, 1950-51 and 1952-53, the assessee sub-family sold some of the 34 items referred to above and some other properties which it had acquired in the course of its own money-lending transactions. Treating all these items of properties on the same footing, viz., as stock-in-trade of the assessee's money-lending business, the Income-tax Officer brought to tax the profits on the sales of these items during the above: said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found in these accounts. It will also examine whether the business of the assessee was in continuation of the previous business or whether it was new business in money- lending started after partition and, if it is the latter, whether the assessee ever made the immoveable properties part of the stock-in-trade of that business. In pursuance of the direction of this court, the Tribunal has submitted the statement of the case framing the question below for the determination of this court: Whether, in the facts and circumstances of the case, the Tribunal had materials before it to sustain the finding that the profits from the sale of the immoveable properties of the assessee in the relevant account years were income liable to be assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from that point of view. Unfortunately, the Tribunal has completely failed to grasp the significance of the observations of this court. It stated in paragraph 18 of the statement of the case: A few months prior to the disruption of the larger Hindu undivided family, the assessee opened its own books of account at Kuala Lumpur on the 8th November, 1946, presumably in anticipation of the division of the family, which must have been under contemplation at about that time.......The manner in which the books have been opened, in our opinion, by itself would go a long way, it is humbly submitted, to establish that even at the time of the opening of the books it was the unmistakable intention of the assessee to start only a money-lending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the case give no indication of any mode of treatment of the disputed items of properties on the basis of which the Tribunal expressed its conclusion in the following terms in paragraph 22: It is in the aforesaid books that the impugned properties have been entered and the income therefrom from time to time utilised for the furtherance of such money-lending business also. There is only one cash books for all the activities of the assessee Kuala Lumpur, both money-lending and in properties. We have consequently to further humbly hold that the properties constitute only the stock-in-trade of such money-lending business and not the capital of the family, as contended. We are frankly unable to arrive at the conclusion expressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be to mean that no person carrying on a money-lending business can have any capital asset whatsoever. Nor is it impossible for a person carrying on money-lending business to taken away from the stock-intrade of that business either money or other asset bearing the character of stock-in-trade and to covert it into a capital asset. It should, therefore, follow that where the assessee had certain capital assets to start with, before the taxing authority can treat them as stock-in-trade of the money-lending business, which the assessee carries on, it has to show that clear and unmistakable evidence is available to establish that those assets came to possess that character. To illustrate the point, suppose an assessee raised funds by the sale, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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