REGENT ESTATES LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred to us was as follows :

(2.) IN the asst. yr. 1950-51, the accounting year being the financial year ending on 31st March, 1950, the assessee entered into a contract with Nederlandsche INdische Handels Bank, N. V., hereinafter referred to for the sake of brevity as the Netherland Bank, for the purchase of 90,000 U.S.A. dollars at the rate of Rs. 333-8-0 for each 100 dollars. On 23rd Sept., 1949, the assessee sold the said dollars to the same bank at the exchange rate of Rs. 474-12-0 for each 100 dollars. The ITO brought to tax the sum of Rs. 1,27,125 on the result of the said transaction of purchase and sale.

(3.) COUNSEL for the Commissioner contended that under the provisions of s. 4(3)(vii) of the IT Act the exemption from taxation was only in respect of receipt not being receipts arising from business. "Business" is defined in s. 2(4) of the Act as including any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. An adventure in the nature of trade is, therefore, within the definition of business. It cannot be denied that there can be an adventure in the nature of trade even out of an isolated transaction. The Tribunal in the present case held that the purchase and sale of exchange constituted business transactions.