TMI Blog1994 (4) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness' and not under the head 'Other sources' ? 2. Whether the finding of the Tribunal that the assessee carried on money-lending business could be said to be based on material on record ? 3. Whether the conclusion of the Tribunal that the interest income is to be assessed as business income could be regarded as reasonable on the facts and in the circumstances of the case ? " The relevant facts leading to the reference may now be set out. The income returned by the assessee, who was an individual and a minor at the relevant time, for the assessment years 1966-67 to 1969-70 included interest from certain loan transactions. The Income-tax Officer relying upon the fact that the entire capital that was received by the minor at a famil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advanced by him ; and that even if the amount was kept with the father for utilisation in the business for some time, the same constituted money-lending business by the assessee. The Tribunal rightly held that the interest earned by the assessee on annuity deposits has to be taxed under the head " Income from other sources ". Sri N. V. Balasubramaniam, learned counsel for the Revenue, submitted before us that the facts found by the Tribunal did not warrant the conclusion that the assessee was carrying on the business of money-lending, and that the interest income should be taxed under the head "Income from other sources". He invited our attention to the definition of the word "business" in section 2(13) of the Act and to the decisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time, attention and labour of a person, normally with the object of making profit. To regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit motive, and not for sport or pleasure. Whether a person carries on business in a particular commodity must depend upon the volume, frequency, continuity and regularity of transactions of purchase and sale in a class of goods and the transactions must ordinarily be entered into with a profit motive." The question as to whether a particular source of income is business income must therefore be decided according to our ordinary notions of what a business is. The activity from which the income is derived must have a se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quent assessment year also. The amounts received by the assessee as interest ranges from Rs. 28,000 in 1966-67 to Rs. 35,312 in 1969-70. Thus, the monies received by the assessee at the family partition has been his stock-in-trade and has been continuously lent by him with a view to earn profit thereon. Even when the money was utilised by the father, it was treated as a loan from the assessee and interest was credited to the assessee's account. We are, therefore, satisfied that the assessee was carrying on the business of money-lending during these assessment years. The interest received on these loan transactions constitute business income. We accordingly answer the questions referred to us in favour of the assessee and against the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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