Law:

Section:

Section 10(3) of the Income-tax Act, 1961 (Corresponding to section 4(3)(vii) of the Indian Income-tax Act, 1922) - Casual and non-recurring receipt - Assessment year 1947-48 - Assessee was engaged in money-lending business - Account books of assessee for relevant year showed that assessee had certain silver coins, which had ceased to be a legal tender out of which part of silver coins were sold at a profit - ITO brought excess amount received on sale of silver coins to tax - Whether after silver coins ceased to be a legal tender they ceased to be part of cash balance of assessee and remained with him only like other assets, therefore, it could not be said that silver coins in question formed part of stock-in-trade of money-lending business of assessee - Held, yes - Whether, consequently, gains accrued on sale of silver coins was of a casual and non-recurring nature and was not income liable to tax - Held, yes FACTS Income-tax Officer found that the assessee had old coins of silver out of which coins worth Rs. 27,600 were sold away while coins worth Rs. 4,160 remained in closing stock. The Income-tax Officer noticed that the assessee encashed 27 high denomination notes of Rs. 1,000 each on the coming into force of the High Denomination Notes Demonetisations Ordinance. On enquiry the assessee explained that he had received these notes in the sale price of the silver coins mentioned above. The accounts of the purchaser saraf were produced and the explanation was accepted. The Income-tax Officer found that the amount received included a sum of Rs. 3,600 in excess of the face value of the silver rupees sold by the assessee. This sum he treated as profits and included it in the total income for the purposes of income-tax as well as the excess profits tax assessment. In appeal the Appellate Assistant Commissioner took the view that the silver rupees were allowed to remain with a view to make profits on their sale and the sum of Rs. 3,600 in question was nothing but profits from an adventure in the nature of trade and was not casual within the meaning of section 4(3)(vii) of 1922 Act. On further appeal, the Appellate Tribunal found that during the accounting year the…

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