TMI Blog1962 (12) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, year, however, the assessee while showing the profit, claimed exemption as income of a casual and non-recurring nature. It was also contended before the Income Tax Officer that the outlay was made as an investment. The claim either as a casual or non-recurring receipt, or as an accretion to capital, indicated by these contentions, was rejected by the Income Tax Officer, who held that notwithstanding that tie transaction was an isolated one, it was nevertheless in the nature of a business adventure. He examined the circumstances under which the assessee purchased the decree and on the facts felt convinced that the purchase itself was as a business proposition. The amount was accordingly brought to tax. An appeal was taken to the Appellate Assistant Commissioner, who agreed in the view taken by the Income Tax Officer. The further appeal to the Tribunal stressing that the profit was casual and non-recurring also failed, the Tribunal taking the view that the only motive which prompted the assessee in purchasing the decree must have been to put it into execution and realise the amount covered thereby with a view to make a profit there on. There was no doubt a spirit of speculatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties, one of whom was this Sundaram Chettiar. It is not quite clear whether Sundaram Chettiar had borrowed the moneys from Rukmani and Co. the assessee,. for the purpose of making advances to Subramaniam Chettiar or for financing the suit laid by Subramaniam Chettiar to recover the moneys from the Zamindar of Oothumalai. It is possible that he did both. But even leaving that consideration apart, the question is whether the purchase of the decree from Sundaram Chettiar, though, no doubt an isolated transaction, was an adventure in nature of trade. 4. It has been contended by Mr. H. Venkataraman, learned counsel for the assessee, that the circumstances would clearly establish that the conclusion reached by the Tribunal is incorrect. It is urged that it could not be predicated at the time the assessee purchased the decree that the assessee would be able to realise anything out of it. But that is a risk which every adventurer takes and1 solely for that reason it cannot be said that it was not at all in the nature of a trade. Learned counsel places strong reliance upon Mothay Gangaraju v. Commr. of Income Tax [1935]3ITR58(Mad) . In that case, the assessee, who was a land owner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gestion that the transaction in question cannot properly be regarded as trade or business. It may be characterised by some of the essential features that mark a trade or business, but not by all of them, so that even isolated transactions can satisfy the description of an adventure in the nature of trade. They also indicated that the motive which impelled the assessee to enter into the transaction is certainly of great importance. If the purchase itself was made solely and exclusively with the intention to resell at a profit and the purchaser had no intention of holding the property for himself or otherwise enjoying or using it, the presence of such an intention is a relevant fact and would raise a strong presumption-until rebutted-that the transaction is an adventure in the nature of trade. In this decision, their Lordships pointed out the various instances which fall on this side or that side of the line-cases of investments followed by profitable resales, cases where the purchaser was a trader and the transaction related to trading in the commodity allied to his usual trade, acts which both preceded and succeeded the transaction in question, the incident associated with the purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite apparent on the face of the transaction itself. It is true that the assessee has not made it a business of purchasing decrees and realising moneys there form. If it had such a line of business, then there would be no question but that the profit from this transaction would be an assessable profit. The difficulty arises only because this is a single transaction of that kind. The case of [1935]3ITR58(Mad) does not seem to us to have much application here, for the assessee in that case, though a money lender, did not purchase a money decree as it were but purchased what might be called intangible Immovable property in the shape of the right, title and interest of another party in a legacy under a will. It could more properly be described as an acquisition of chose-in-action. Had it been a case where that person had advanced moneys for the litigation with regard to the legacies, it might well be that the conclusion reached by the learned Judges would have been different. Having regard to the fact that the assessee in the present case is a money lender and Sundaram Chettiar from whom the decree was purchased was himself one of the customers of the assessee and that the assessee m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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