TMI Blog2015 (8) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... ld during the assessment year in question are liable to be considered as "stock entry". Thus looking to the nature of commodity, i.e., shares and also continuity of transactions in several years, in our view, the Revenue was justified in treating the income as "business income" and not "capital gain". Decided in favour of Revenue. - Income Tax Appeal No. - 80 of 2004 - - - Dated:- 14-8-2015 - Hon'ble Sudhir Agarwal And Hon'ble Shashi Kant,JJ. For the Appellant : S.D. Singh,Krishna Dev Vyas For the Respondent : C.S.C.,R.K.Upadhyay ORDER 1. Heard Sri S.D. Singh, learned Senior Advocate, assisted by Sri Krishna Dev Vyas, Advocate, for appellant and Sri R.K. Upadhyay, Advocate, for respondent. 2. This appeal under Section 260A of income Tax Act, 1961 (hereinafter referred to as Act, 1961 ) has arisen from assessment proceedings for the assessment year 1992-93 wherein the Revenue has considered the transaction of shares by appellant as adventure in the nature of trade instead of income from capital gain and have taxed appellant accordingly. 3. This Court, when admitted appeal, formulated following two substantial questions of law to adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g from one company to another is a part of prudent investment and unless volume and period of transactions are such which may justify a short term regular transaction feature, mere fact that more than one such transactions have taken place, the same will not partake nature of business, hence the view taken by Revenue is clearly illegal. 8. In the order of Tribunal, total number of transactions in sale and purchase of share commencing from financial year 1990-91 till 1998-99 have been shown as under: Financial Year Assessment Year Number of Transactions made Purchase Sale 1990-91 1991-92 11 5 1991-92 1992-93 4 9 1992-93 1993-94 2 4 1993-94 1994-95 1 - 1994-95 1995-96 3 1 1995-96 1996-97 4 2 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld was land. 13. Again in Mohammed Meerakhan (P.M.) Vs. Commissioner of Income-tax, (1969) 73 ITR 735, the Court held that it is not possible to evolve any single legal test or formula which can be applied in determining whether a transaction is an adventure in the nature of trade or not. The answer to the question must necessarily depend in each case on the total impression and effect of all the relevant factors and circumstances proved therein, which may determine the character of the transaction. 14. Both these cases, however, pertain to land and, therefore, may not be of much help in the case in hand. 15. In Janki Ram Bahadur Ram Vs. CIT (1965) 57 ITR 21 (SC), the Court held, question whether profit in a transaction has arisen out of an adventure in the nature of trade is a mixed question of law and fact. At the relevant point of time, if a transaction is related to the business which is normally carried on by Assessee, though not directly part of it, an intention to launch upon an adventure in the nature of trade may readily be inferred. A similar inference would arise where a commodity is purchased and sub-divided, altered, treated or repaired and sold, or is convert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transaction was or was not an adventure in the nature of trade, the problem must be approached in the light of intention of Assessee having regard to legal requirements which were associated with the concept of trade or business. A mere profit motive in entering into transaction was not decisive, for an accretion to capital did not become taxable income merely because an asset was acquired in the expectation that it might be sold at a profit. It also relied on Janki Ram Bahadur Ram Vs. CIT (supra), where it was held that if a transaction was related to the business which is normally carried on by the Assessee, though not directly part of it, an intention to launch upon an adventure in the nature of trade might readily be inferred. It also referred to the principles laid down in Raja Bahadur Kamakhya Narain Singh Vs. Commissioner of Income Tax (1970) 77 ITR 253 (SC) and said: ... the question of adventure in the nature of trade was again considered by this Court and it was reiterated that since the expression adventure in the nature of trade implied the existence of certain element in the transactions which in law would invest these with the character of trade or busines ..... X X X X Extracts X X X X X X X X Extracts X X X X
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