TMI Blog1979 (12) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... the accounting years should be treated as its income from business. The ITO repelled this contention and held that the surplus was chargeable under the head " Income from other sources ". In his opinion, the transactions could not be held to amount to a business for the following reasons: (1) The shares are of private limited companies in which no person can have any dealings. (2) Even Dalmia Dadri Cement Ltd., which is a public limited company is controlled by R. Dalmia and the question of anyone dealing in these shares does not arise. (3) None of the shares are quoted at stock exchange. All the shares are treated as investments in the balance-sheet. (4) Purchases and sales of shares during the years under appeal were only to thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty and regularity of the transactions, they raise an inference that the intention of the assesseecompany was to carry on business in shares. The share transactions were not isolated or solitary as could be stamped with the character of investment, notwithstanding the fact that in the balance-sheet the shares had not been mentioned as stock-in-trade. The Tribunal pointed out that the concept of business was universal and that, therefore, it could be presumed that even if an assessee purchased and sold only shares of, from and to inter-connected companies, yet the transactions could be held as in the nature of a business and the profit therefrom as the business profit, since the law does not prohibit an assessee from dealing with the shares o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulsory sales have been held by the Supreme Court as no sales for want of volition between the contracting parties. Hence to a limited extent the assessee cannot be said to be dealer in shares during the years under appeal though all other elements of sale are conspicuously present which indicate that there were elements of dealings in share transactions. The heads of income must be decided from the nature of income by applying practical notions and as the income cannot be brought to tax under section 28 of the Act it could be brought to tax under the residuary head in the circumstances of the case and thus income from sale of shares is to be treated as income from other sources. For the reasons stated in the above paragraph, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atutes, is a word of indefinite import. In taxing statutes, it is used in the sense of an occupation or profession which occupies the 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 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. By the use of the expression 'profit motive' it is not intended that profit must in fact be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r basis for saying that the transactions in shares were entered into by the various companies without the exercise of their volition. All that the Tribunal has said is that since R. Dalmia had control over the several companies and inasmuch as some of these shares also passed into his hands, it should be held that these transactions were transactions imposed on the various companies by the will of Dalmia. In the first place there is no material for coming to this conclusion. There is nothing to show that it was Dalmia who imposed these transactions on the assessee or the other companies belonging to the group. But even assuming this to be a fact and even taking it that the transactions were entered into by the various companies under the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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