Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business income - Chargeable as - Assessment year 1993-94 - Petitioner was engaged in business of job work of manu facture of silver chains upon orders received from customers was getting readymade silver chains manufactured by him which he exchanged for silver by other silversmiths - Petitioner admittedly kept certain amount of stock of silver chains in anticipation for orders of Majoori work and that, silver was required by petitioner for his business either as stock-in-trade or raw material - Silver had been purchased at least partly out of fund kept for purposes of business - Asses see sold silver and earned profit - Whether silver was either stock-in-trade or raw material of petitioner and by no stretch of imagination, it could be treated as capital asset - Held, yes - Whether profit arising out of silver in question should be assessed as business profit - Held, yes R.S. Agarwal for the Petitioner. A.N. Mahajan for the Respondent. ORDER 1. By means of present writ petition filed under article 226 of the Constitution of India, the petitioner seeks a writ order or direction in the nature of certiorari calling for the records of the case and quashing the order dated 21st March, 1997 passed by the Income-tax Settlement Commission, New Delhi, respondent No. 1 filed as Annexure 1 to the writ petition and other consequential reliefs. 2. Briefly stated facts giving rise to the present petition are as follows : The petitioner is an individual. The petitioner, according to him is engaged in the business of job work of manufacture of silver chains upon orders received from customers. He had 536 kilograms (net) of silver which he had sold during the financial year 1992-93 for a total sum of Rs. 41,78,937. According to the petitioner, he had acquired the silver over a period of years at total cost of Rs. 30,43,711 which resulted in net profit of Rs. 11,35,226. The Income-tax authorities took certain proceedings, whereupon the petitioner approached the Income-tax Settlement Commission, New Delhi under provisions of section 245C of the Income-tax Act, hereinafter referred to as the Act. After giving opportunity of hearing to…

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