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TMI Blog1962 (11) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... erty which was purchased in court auction by the assessee on November 22, 1951, as a transaction liable to be assessed?" This question arose in the following circumstances stated by the Tribunal in its statement of the case. The assessee, who is a money-lender, submitted his return for the assessment year 1954-55 for which the accounting year was the Telugu year ending with April 3, 1954. During the course of his money-lending business, it was the practice of the assessee to take over lands in satisfaction of the money-lending debts, on the debtor being unable to pay the principal or interest or both. During the accounting year, the assessee sold five pieces of land for a total sum of ₹ 58,500 four of which had been so acquired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late Tribunal also took the same view, namely, that all the five transactions are of the same category and consequently dismissed the appeal. During the course of its order, the Tribunal, though it noted that the departmental representative had pointed out that the sum of ₹ 5,000 represented the surplus on sale of land which was purchased in court action sale on October 22, 1951, and that the said sale transaction did not have its origin in any money- lending business of the assessee, none the less merely because the assessee's representative did not make any distinction in regard to the sum of ₹ 5,000, treated this amount of ₹ 5,000 along with the other transactions as if they are of the same category. What the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in Saroj Kumar Mazumdar v. Commissioner of Income-tax [1959] 37 I.T.R. 242; [1959] Suppl. 2 S.C.R. 846, which in turn approved the statement of law of the same court in Venkataswami Naidu and Co. v. Commissioner of Incometax [1959] 35 I.T.R. 594; [1959] Suppl. 1 S. C. R. 646. In the former case, it was held, firstly, that where a transaction was not in the line of the business of the assessee but was an isolated or single instance of a transaction, the onus was on the department to prove that the transaction was an adventure in the nature of trade and, secondly, that at the time he entered into an agreement with the society, the appellant was doing good business, as was shown by the large amounts on which he was assessed to tax, and it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of trade." Their Lordships formulated the question***, "Can it be said, in the setting of the facts and circumstances of the present case, set out above, that the transaction in question has such characteristics as to point to the conclusion that it was a venture in the nature of trade?" and finally concluded as follows [1959] 37 I.T.R. 242, 254 "In all the circumstances of this case, the total impression created on our mind is that it had not been made out by the department that the dominant intention of the appellant was to embark on a venture in the nature of trade, when he entered into the agreement which resulted in the profits sought to be taxed." It is obvious in this case that the department, upon w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dictum in Ryall v. Hoare [1923] 2 K.B. 447, 454, namely, "...a casual profit made on an isolated purchase and sale, unless merged with similar transactions in the carrying on of a trade or business is not liable to tax" and also the following dictum of Lawrence L.J. in Leeming v. Jones [1930] 1 K.B. 279, 362: "It seems to me in the case of an isolated transaction of purchase and re-sale of property there is really no middle course open. It is either an adventure in the nature of trade, or else it is simply a case of sale and re-sale of property." In the light of these decisions and the authoritative pronouncement of their Lordships of the Supreme Court in Saroj Kumar Muzumdar v. Commissioner of Income-tax [1959] 37 I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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