TMI Blog1966 (10) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case, the transactions constituted a venture in the nature of trade and the surplus of ₹ 1,25,000 was assessable to tax? There was an agreement dated the 18th May, 1956, by which the Mundakayam Valley Rubber Company Ltd. agreed to sell to one A.V. George a rubber estate called the Kuttikal Estate measuring 477.71 acres. A.V. George entered into that agreement on behalf of the Kailas Rubber Company Ltd. On the 15th August, 1955, the assessee entered into an agreement with A.V. George to purchase the Kuttikal Estate for ₹ 6 lakhs and paid an advance of ₹ 11,000. The agreement provided that on payment of the balance of ₹ 5,89,000, A.V. George will execute the sale deed himself or cause it to be executed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The sole question for determination is whether that view is justified on the facts and circumstances of the case. Section 6 of the Indian Income-tax Act, 1922, specifies the heads of income chargeable to income-tax. Profits and gains of business come under the fourth of the six heads specified in that section. The expression business is defined in section 2(4) of the Act. According to that definition it includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture . According to Fletcher Moulton L.J.--Liverpool and London and Globe Insurance Company v. Bennett [1913] 6 Tax Cas. 327, 371--the words in the nature of trade qualify only the word concern which immediately p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quality and quantity. The business characteristics or the business elements which exist in one adventure may not exist in another, and the characteristics which are in fact present might vary from one adventure to another. So, courts have observed that it is difficult to frame a formula which would be applicable to whatever state of facts, so as to determine whether a given activity is or is not an 'adventure in the nature of trade'. Each case would have to be examined on its own facts. (Iyengar on Income-tax, 5th edition, volume 2, page 958). In the case before us the adventure commenced when the assesse entered into the agreement with A.V. George to purchase the Kuttikal Estate for a sum of ₹ 6 lakhs and paid an advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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