ANNA RACEK Vs. COMMISSIONER OF INCOME TAX BOMBAY

JUDGEMENT

(1.) THE short question that we are called upon to decide in these two references is whether certain transaction in the purchase and sale of gold bars entered into by the assessee, Mrs. Anna Racek, and her late husband, F. Racek, were entered into as business transactions or as adventure in the nature of trade or commerce or whether they represented merely sales of investments. The facts are as follows.

(2.) F. Racek was an Austrian citizen doing business in India in hurricane lanterns, petromax lanterns, mantles and other sundry articles. He died on March 15, 1943, and it is not in dispute that the assessee, his widow, has succeeded to his estate. During his lifetime F. Racek amassed considerable wealth and on January 1, 1942, he was possed of over Rs. 21 lakhs. It is not in dispute also that this amount was not connected with his business and was merely his own personal wealth outside the business. He had kept this money intact in various Indian and foreign banks in current account and as call money and fixed deposit. The cash on hand alone was over Rs. 6 lakhs.

(3.) DURING his lifetime F. Racek parched a large number of gold bars commencing from November 15, 1933, and until a few days before he padded away on March 15, 1943. These bars have been subsequently sold and a composite statement of purchases and sales had been given in the statement of the case which for convenience may be reproduced here. <FRM>JUDGEMENT_40_TLMHH0_1967Html1.htm</FRM>