TMI Blog1990 (7) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... , was entered into with the intention of making profit and that such profit earned on the sale of National Gold Bonds, 1980, would be assessable as business income in the hands of the assessee ?" In our view, the question as framed does not bring out correctly the point at issue which we are required to determine. It is also framed in manner which begs the question. With the consent of the parties, therefore, we have reframed the question as follows : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the transaction of purchase and sale of the National Defence Gold Bonds, 1980, amounted to an adventure in the nature of trade and the resulting profit was taxable as business income in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt and other High Courts. The Supreme Court, in the case of G. Venkataswami Naidu and Co. v. CIT [1959] 35 ITR 594, laid down certain tests for determining whether any given transaction can be looked upon as an adventure in the nature of trade. It said (headnote): "In deciding the character of such transactions several factors are relevant, such as e.g., whether the purchaser was a trader and the purchase of the commodity and its resale were allied to his usual trade or business or incidental to it ; the nature and quantity of the commodity purchased and resold ; any act subsequent to the purchase to improve the quality of the commodity purchased and thereby make it more readily resaleable ; any act prior to the purchase showing a design ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that actual payment for the purchase was made on September 29, 1980, and the sale took place on October 1, 1980, would indicate that the sole motive for purchasing these gold bonds was to make a profit by selling them. This argument ignores the fact that the bonds were purchased on April 3, 1980, and were sold only in October, 1980. There was, therefore, no question of any quick profit. There does not appear to be any material which would establish that the only motive of the assessee in purchasing these bonds was to make profit by selling them at a later date. The assessee had not purchased bonds in very large quantities thereby indicating a desire to trade in them ; nor is there any material to show that he had no intention of retai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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