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1 - 10 of 22 (0.50 seconds)Section 10 in The Income Tax Act, 1961 [Entire Act]
G. Venkataswami Naidu And Co. vs Commissioner Of Income-Tax, Madras on 18 April, 1955
37. The second principle which the Supreme Court laid down in the case at page 609 is :
Janki Ram Bahadur Ram vs Commissioner Of Income Tax, Calcutta on 31 March, 1965
38. It is settled position in law that it is for the revenue to establish that the profit earned in a transaction is within the taxing provision and is, on that account, liable to be taxed as income. The nature of the transaction must be determined on a consideration of all the facts and circumstances which are brought on the record of the income-tax authorities. It has consistently been held by this court that the question whether profit in a transaction has arisen out of an adventure in the nature of trade is a mixed question of law and fact. (See Janki Ram Bahadur Ram v. CIT ).
Commissioner Of Income Tax, Madras vs Messrs. Best & Co on 2 November, 1965
39. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the revenue, an adverse inference could be drawn against the assessee if he failed to put before the department material which was in his exclusive possession. This process is described in the law of evidence as shifting of onus in the course of proceeding from one part to the other. There is no reason why the said doctrine is not applicable to income-tax proceedings. (See CIT v. Best and Co. (P.) Ltd. ).
Commissioner Of Income-Tax, West ... vs Durga Prasad More on 26 August, 1971
40. However, it should not be overlooked that, so far as the question of onus is concerned, the law does not prescribe any quantitative test to find out whether the onus in a particular case has been discharged or not. It all depends on the facts and circumstances of each case. In some cases, the onus may be heavy whereas, in others, it may be nominal. There is nothing rigid about it. (See CIT v. Durga Prasad More ).
Commissioner Of Income-Tax, Madras vs P.K.N. Co. Ltd. on 10 December, 1965
41. In considering the question whether a particular transaction is an adventure in the nature of trade, a mere existence of power in the memorandum of association of a company to sell or turn into account, dispose of or deal with the properties and rights of all kinds has no decisive bearing on the question whether the profits arising therefrom were capital accretion or revenue. The question whether in purchasing and selling land the taxpayer enters upon a business activity has to be determined in the light of the facts and circumstances. The purpose or the object for which it is incorporated where the taxpayer is a company may have some bearing, but is not decisive, nor is the circumstance that a single plot of land was acquired and was thereafter sold as a whole or in plots, decisive. Profit motive in entering into a transaction is also not decisive. The incidental sale of uneconomical or inconvenient plots of land could not convert what was essentially an investment into a business transaction in real estate. (See CIT v. P. K. N. Co. Ltd. ). In that case the primary object of the company was to take over the assets of the firm, to carry on the business of planters and to earn profits by the sale of rubber; the acquisition of the estates was not for the purpose of carrying on business in real estate.
Saroj Kumar Mazumdar vs The Commissioner Of Income-Tax, ... on 4 May, 1959
42. The question whether a solitary transaction of purchase and sale of land can be regarded as adventure in the nature of trade came up for consideration in the case of Saroj Kumar Mazumdar v. CIT . In that case the appellant, who was engaged in various types of business activities, was a shareholder and director or managing director of several companies and was also a partner in a firm of engineering works. He also held shares of the value of Rs. 2,45,000, a major portion of which belonged to other members of his family. For the assessment years 1946-47
and 1947-48, he was assessed to income-tax on the sum of Rs. 53,000 and Rs. 59,000, whereas for the assessment year 1948-49 he submitted a return showing a loss of about Rs. 2,000. With a view to acquiring a plot of land for the purpose of building a residential house for himself and constructing a workshop in connection with his business activities, the appellant had paid, in pursuance of an agreement entered into on January 10, 1946, a sum of Rs. 32,748, in all, to an insurance society, being 25% of the estimated price of a plot of land comprised in a land development scheme undertaken by the society. As the area which the society had undertaken to develop was in the occupation of the Government, being requisitioned for purposes connected with the prosecution of the second world war, one of the terms of the agreement was that the transaction of purchase would be completed within six months of the lands being released from Government occupation. Later, the appellant found one Y to whom he agreed to assign his rights under the agreement with the society for a consideration of Rs. 1,07,000, the amount to be held by him on suspense account until the transaction of purchase of the plot of land was finalised. Y undertook to pay the balance of the sale price of the plot of land, Rs. 96,000, to the society. The appellant received the sum of Rs. 1,07,000 on April 3, 1947, from Y and ultimately on December 27, 1950, the society executed a deed of conveyance of the plot of land to the daughter of Y. The question was whether the transactions of the assessee amounted to an ' adventure in the nature of trade' and the sum of Rs. 74,485 received by the appellant in excess of the amount paid by him to the society was profit taxable under Section 10 of the Indian I.T. Act. The Appellate Tribunal came to the conclusion that the sale was an adventure in the nature of trade and that the excess was profit assessable to tax, on the following grounds: (i) that the payment of Rs. 32,748 came out of a loan from a company (which finding was not borne out by the books of that company); (ii) that the appellant could not have paid the balance of the purchase price of the plot and had no means to construct a house ; (iii) that the site itself fetched no income, thus showing that the appellant's venture could not be an investment but only an excursion into the realm of trade. On special appeal to the Supreme Court, the Supreme Court by majority took the view that where a transaction was not in the line of the business of the assessee but was an isolated or single instance of a transaction, the onus was on the department to prove that the transaction was an adventure in the nature of trade; that there was no clear evidence in support of the inference of the Appellate Tribunal that the land was purchased with the sole intention of selling it later at a profit; that as at the time he entered into the agreement with the society the appellant was doing good business, as was shown by the large amounts on which he was assessed to tax, it was not unnatural for him
to look forward to continue his business in as prosperous a way as he had been doing in the recent past, and to raise sufficient funds to build his own residential house or to construct a workshop for his own engineering business ; and, therefore, the probability that the site might appreciate in value did not necessarily lend itself to the inference that the transaction was a venture in the nature of trade, as distinguished from a capital investment. By majority, the Supreme Court took the view that the transaction was not an adventure in the nature of trade and the amount was not assessable to tax under Section 10 of the Indian I.T. Act. Upon appreciation of the material that was brought to the notice of the Supreme Court, it took the view that in all the circumstances of the case, the total impression created on their mind is that it has not been made out by the department that the dominant intention of the appellant was to embark on a venture in the nature of trade, when he entered into the agreement which resulted in the profits sought to be taxed. Thus, it is quite clear that this case is decided on its own facts and does not lay down any general principle for applicability to cases where a company as one of its principal objects of incorporation, ventures in purchase and sale of lands.
Bhogilal H. Patel vs Commissioner Of Income-Tax (Central) ... on 8 August, 1969
43. It was urged by Mr. Dastoor that before any transaction can be regarded as an adventure in the nature of trade regard must be had to the intention to make profits at the time when the purchase was effected and reliance was placed by him upon the decision of this court in the case of Bhogilal H. Patel v. CIT [1969] 74 ITR 692. In this case, the Division Bench of this court held that in order that it may be held that a person is undertaking a trade or business, or entering into an adventure in the nature of trade, it is essential that the particular transactions under scrutiny should have been entered into with the intention of earning a profit. Though that is not a conclusive test it is certainly an essential test before such a conclusion could be drawn; but such a case is quite different from the case of a person purchasing property with the dominant intention of using it himself or enjoying it himself but at the same time expecting that at some future date, if it goes up in value, he may take advantage of the rise in the price. If a person invests money in land intending to hold it, enjoy its income for some time, and then sells it at a profit, it would be a case of capital accretion and not profit derived from an adventure in the nature of trade. Cases of realisation of investments consisting of purchase and resale, though profitable, are outside the domain of adventure in the nature of trade.
Commissioner Of Income-Tax, Madras vs Kasturi Estates (P.) Ltd. on 21 October, 1965
48. Strong reliance was placed by Mr. Dastoor upon the decision of the Madras High Court in the case of CIT v. Kasturi Estates (P.) Ltd. [1966] 62 ITR 578. The Madras High Court has taken the view that the decision of the question whether profits made by selling land by an assessee carrying on business are profits from business or merely capital gains will depend on the effect of all the facts and circumstances found by the Tribunal. The findings of fact arrived at by the Tribunal are conclusive and are not open to review under the limited jurisdiction of the High Court on a reference, except on a misdirection in law in the process of arriving at them or on the ground that there was no evidence on which they could be reached. The conclusion drawn on proved facts or facts found on evidence is, however, a different matter and that may raise a question of law or a mixed question of law and fact. To the latter category belongs the question whether a certain receipt is realisation of capital assets, or revenue from trade or business, or from a transaction viewed as an adventure in the nature of trade.