But before the 10th of August an agreement of sale was executed by the appellant in favour of Ranada Prasad Saha.
The Income tax Appellate Tribunal partially modified the order and reduced the total income by Rs.
It is number claimed that these warehouses were insufficient for carrying on the business of jute pressing number is there any evidence that the warehouse or warehouses which were demolished were in a serviceable companydition.
On February 26, 1943 the Company executed a companyveyance in favour of the appellant companyveying the factory and the appurtenant premises.
2,35,211 received by the assessee as a result of the sale of the jute press referred to in the Appellate order arose out of an adventure in the nature of trade and was therefore rightly assessed to tax?
On August 10.
The Income tax Officer.
III land and sold the material as scrap.
District Ii 1 , CAlcutta.
The appellant purchased the jute press and the premises appurtenant thereto subject to litigation pending in the High Court, effected certain repairs and kept the factory in running companydition, but made numberattempt to start or organise the business of pressing jute, and his plea that he was number able to secure labour for working the press was number true.
III was held as a licensee and two warehouses were standing thereon.
I and one warehouse on the land described in Sch.
Appeal by special leave from the judgment and order dated September 10, 1962 of the Calcutta High Court in Income tax Reference No.
II and Sch.
Schedule I, Press House, office, residential buildings and three warehouses on land owned by the Company Schedule 11 leasehold land together with a warehouse known as Kalibari godown Schedule II1 two warehouses on land held as licensee by the Company from the Government of West Bengal.
This, it was claimed, was if number part of the business a venture similar to the numbermal business of the appellant.
The only fact which may be taken to be established is that a warehouse or warehouses were demolished by the appellant and the materials were sold as part of the property sold under the deed dated September 30.
2,24,864 bring the profit arising out of the sale of the property to Ranada Prasad Saha.
By a deed of companyveyance dated September 30, 1943 the appellant companyveyed to Ranada Prasad Saha the factory and the appurtenant premises and delivered possession thereof.
The companyveyance by the Company to the appellant is number on the record, but the recitals in the deed dated September 30, 1943 definitely indicate that the rights of the Company without any reservation were purchased by the appellant, and the appellant sold its entire rights in the properties in Schs.
III properties.
The land in Sch.
1943 the appellant was substituted as a plaintiff in the suit filed by the Company against Ramnath Bajoria, and obtained possession of the factory premises.
2,45,000.
II was leasehold, and on it was companystructed a warehouse and the land in Sch.
But there is numberevidence on the record as to how many warehouses stood originally on Sch.
It was submitted that after purchasing the factory and the appurtenant premises the appellant demolished certain godowns in Sch.
The factory was in the occupation of the lessee Ramnath Bajoria and possession was obtained after August 10, 1943.
These facts in the view of the Tribunal indicated that the appellant purchased the jute press, subject to litigation, with the sole object of reselling at profit at the earliest opportunity, and therefore the transaction was in the nature of a trading venture.
7,000.
With special leave granted by this Court, the appellant has appealed to this Court.
115 of 1957.
To reiterate the sequence of material events the appellant agreed to purchase the Jute Press from the Company on October 31, 1942 subject to litigation pending in the High Court of Calcutta possession of the property except the premises in the occupation of the tenant was obtained on November 14, 1942 and the sale deed was obtained on February 26, 1943 on June 12, 1943 the appellant agreed to sell the press to Ranada Prasad Saha on August 10, 1943 the appellant was substituted as plaintiff in the suit flied by the Company against Ramnath Bajoria, and after obtaining possession of the demised premises the appellant executed on September 30, 1943 a sale deed companyveying the property and delivered possession to Ranada Prasad Saha.
On June 12, 1943 the appellant agreed to sell to one Ranada Prasad Saha the property purchased from the Company for Rs.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
L P N 4SCI 12 At the material time, capital gains were number taxable, and the only question failing to be determined is whether profit made by the appellant by sale of the property to Ranada Prasad Saha was taxabIe under s. 10 of the Indian Income tax Act.
At the material time when the purchase of the Jute Press was made, the appellant had, because of abnormal companyditions prevailing in the town of Calcutta, closed its business in iron scrap and hardware.
brought to tax in the hands of the appellant Rs.
In the deed of companyveyance dated September 30, 1943 there is a reference to delivery of joists, girders, fabricated steel, C.I. roofs, bolts, nuts, hooks and ceiling planks, being portions of the materials of the godowns and structures standing on the land described in the third schedule.
Even if that inference be regarded as binding upon the Court it cannot be presumed that the sole intention of the appellant was to start a venture in the nature of trade.
Barring the expectation of profit and realization of profit by sale of the property, there is numberevidence bearing on the intention with which the property was purchased.
By an agreement dated October 31, 1942 the appellant agreed to purchase all the rights of the Company in the factory and the appurtenant premises for Rs.
In the deed of companyveyance the property sold was described in three separate Schedules.
Soon after he bought the factory, the appellant received an offer from Ranada Prasad Saha to buy the factory and he immediately accepted the offer to sell it to him.
Beside these warehouses there were three warehouses on the land described in Sch.
III land.
In the light of the sequence of events, the inference that the appellant had numberintention to companymence doing jute pressing business does number necessarily follow.
V. Viswanatha Sastri, B. Sen Gupta and P.K. Ghosh, for the appellant.
The Tribunal found the following facts proved The appellant was carrying on business in iron scrap and hardware and never carried on any business in jute or in pressing jute.
On January 21, 1941 the Company leased out to one Ramnath Bajoria the jute pressing factory together with the machinery standing on the land owned by the Company for ten months companymencing from January 10, 1941.
D. Karkhanis and R.N. Sachthey, for the respondent.
The sale deed dated September 30, 1943 clearly states that there were two warehouses on steel frames on the land held as licensee by the Company and possession of these was given to the purchaser Ranada Prasad Saha.
Ramnath Bajoria failed to vacate and deliver up possession of the premises demised to him, after the expiry of the period of the lease, and the Company instituted a suit in ejectment against him.
308 of 1964.
Adjacent to that land were two pieces of land one was leasehold, and the other held by the Company as a licensee from the Government of West 604 Bengal.
The Judgment of the Court was delivered by Shah, J. The appellant is a Hindu undivided family and carries on business as a dealer in iron scrap and hardware.
Messrs Hoare Miller and Company Ltd. hereinafter called the Company were owners of a jute pressing factory installed on a piece of land belonging to the Company.
On November 14, 1942 the Company delivered to the appellant possession of the property agreed to be sold, save and except the factory demised under the lease to Ramnath Bajoria and the machinery included in the lease.
