TMI Blog1961 (10) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... of his own at that place, the assessee borrowed the amount necessary for the purchase of the property partly from his son-in-law and partly from certain others. He then employed a staff to work the estate and went on some occasions to that country with a view to supervise the same. He, however, made no attempts to pay off the doubts contracted for the purchase in any manner whatsoever. In the first year the property yielded an net income of about ₹ 16,485, a fairly high return for the price paid. Strangely enough, even that amount was not utilised to pay off the creditors. On November 1, 1950, the assessee sold the property to a resident of the place for a sum of ₹ 1,50,000. The debts contracted for the purchase of the property were then paid off out of the sale proceeds. The resultant profit to the assessee in the transaction was ₹ 36,230. This amount was brought to Indian Income-tax for the assessment year 1951-52 on the footing that it represented profits obtained by the assessee in the course of an adventure in the nature of trade, by the Income-tax Officer, Madurai, along with the assessee's foreign income of ₹ 16,485 received by him in working the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the footing that the expected to sell the property early and discharge the loans and that is what he did. It is rather significant that the assessee did not keep the property himself for any length of time, although it produced a very good return for the amount of price paid for it, he having sold it within two years of the purchase. It cannot be gainsaid that the circumstances under which the bank had to sell the property were propitious for a speculation in regard to its purchase and ultimate sale at a profit. The assessee must, therefore, have intended to purchase with a view to sell as a business venture. Mr. Srinivasan, learned counsel appearing for the assessee, places the assessee's case in two ways: (1) By contending that some of the features to which we have made a reference earlier are capable of a different interpretation and will not by themselves be sufficient to infer an intention on the part of the assessee to embark upon an adventure in the nature of trade, while he made the purchase. In addition there are certain other circumstances, which show that what the assessee intended at the time of the purchase was only to find an investment for his moneys at Ceylon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it made was comparatively small, judged in the light of the income from the property. The question whether a particular transaction is an adventure in the nature of a trade would depend, not on the extent of the property purchased, but on the capacity of the particular individual to speculate in regard to that property. As regards profit, the size of the profits actually obtained will hardly be a relevant circumstance in deciding the question; what is more relevant is the object with which the assessee purchased the property. It was then argued that the assessee would have hardly speculated in the purchase of immoveable property at Ceylon towards the end of the year 1948, having regard to the fact that it was the most inopportune moment for an adventure of that kind. No evidence, however, has been placed before us to show that the time was inopportune. On the other hand, the time appears to have been very opportune in the sense that the owner of the property was anxious to sell away the property and close down it was business at Ceylon. Added to this, there is this admitted fact that the property itself was sold at a substantial profit. It is then said that, as the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to when exactly the litigation by the brother started or why it was difficult for the assessee to hold on to the property, if he intended it as an investment. A document, annexures A , is filed to evidence the claim of the brother. But that is merely a caveat calling upon the assessee to give information of any registered document that the might execute in Ceylon. It is true that the onus of proving that a particular transaction is an adventure in the nature of trade and that the profit obtained by the assessee was assessable to tax is on the department; but, as we stated above, there are several circumstances in the case, which will justify the conclusion arrived at by the Tribunal. Mr. Srinivasan then contended that the department as well as the Tribunal went wrong in a few of the reasons given by them. For example, he submitted that the Income-tax Officer was in error when he stated that it was the habit of Nattukottai Chettiars to buy property when they go cheap and sell them at a high price and thereby make a profit. There is, no doubt, some force in the contention that this reason is not a valid one, though it might be that Nattukottai Chettiars have an aptitude for bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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