Law:

Section:

Section 2(13) of the Income-tax Act, 1961 (corresponding to section 2(4) of the Indian Income-tax Act, 1922) - Adventure in nature of trade - Assessment year 1953-54 - One 'B', purchased a concrete floating dry dock - He made attempts to either dispose it of or working it but efforts proved futile - Thereafter, he formed a partnership for running and operating said dock for doing work of inspection, repair and overhaul of ships - All partners made efforts to set up a dry dock and workshop for said purpose but could not do so - Ultimately port authorities decided to acquire aforesaid dry dock for certain amount - ITO brought to tax profits arising out of aforesaid transaction - Tribunal however, held that transaction could not be said to have been entered into as venture in nature of trade but surplus realised was only a capital accretion - On instant reference, it was seen from records that 'B' and other partners made positive efforts to obtain a mooring berth and land space for workshop but they did not succeed - In fact, port authorities categorically informed them that they would not be permitted to have facility of any mooring berth or land space for their workshop, and it was in that situation sale of dry dock ultimately took place - Whether, in view of aforesaid circumstances, it could be said that conclusion arrived at by Tribunal was correct and it was to be upheld - Held, yes FACTS One 'B', a marine engineer, initially purchased a concrete floating dry dock. He made attempts either at disposing it of or working it but these attempts proved futile. Subsequently, three persons agreed to form themselves into a partnership for the purpose of running and operating the concrete floating dry dock belonging to 'B' for the inspection, repair and overhaul of ships. It was agreed that as soon as the partnership deed was signed, the concrete floating dry dock should be taken over by the aforesaid firm at a valuation to be mutually agreed upon after the dock had been certified and valued. The deed of partnership recited that 'B' was the sole and absolute owner of reinforced concrete dock lying in a basin off the share, that 'B' was desirous of running and operating…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492