Law:

Section:

Section 28(i) , read with section 2(13), of the Income-tax Act, 1961 (Corresponding to section 10, read with section 2(4), of the Indian Income-tax Act, 1922) - Business income - Chargeable as - Assessment year 1945-46 - Assessee belonged to trading family and was doing business in various lines - He negotiated and purchased from S, who was in financial difficulties, a mortgage decree for about a third of its face value - Assessee paid to numerous creditors of 'S' and incur heavy legal expenses and for that purpose he had to borrow moneys from bankers and money lenders - In meantime, assessee instituted proceedings for execution of decree and eventually brought to sale some of mortgaged properties - Amount realised by assessee on sale of those two parties exceeded prices paid by him on of those properties - After deducting sum towards expenses for realisation and further sum paid as interest to 'S', ITO held assessee liable to pay income-tax on balance as constituting profit from adventure in nature of trade and brought it to tax under section 10 of 1922 Act, read with section 2(4) of 1922 Act - Tribunal rejected assessee's case that he had entered into transaction with two-fold object of helping friend out of his difficulties and held that intention of assessee in undertaking this venture was only to make a profit - Whether share in mortgage decree was in no sense investment and it could not give assessee pride of possession or aesthetic enjoyment - Held, yes - Whether favourable terms on which decree was purchased and elaborate steps taken for bringing properties to sale constituted adventure in nature of trade - Held,yes - Whether, therefore, amount in question was property assessed to tax - Held, yes FACTS The assessee was a merchant doing business in timber, tiles, furniture, iron were and hardware in partnership with others and on his own. He also owed sea-going schooners and other boats jointly with others for transporting cargo and passengers. He negotiated and purchased from 'S' who was in financial difficulties, a mortgage decree for about a third of its face value. According to the assessee, since he had no funds of his own, he had to borrow a sum…

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