Casual sale of excess film after processing held outside business turnover because no trading intention or regular dealing was shown.

Sales of unutilised excess positive film retained after processing customers' films were not treated as business sales where the assessee had not acquired the film for resale, had not intended to trade in that commodity, and the limited, occasional transactions lacked the volume, frequency, continuity and profit motive needed to establish a trading business. Mere retention of leftover material to meet wastage and processing contingencies did not convert it into trading stock. The sale was therefore characterised as a casual sale outside the assessee's business and was not includible in taxable turnover.

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Issues: Whether the sale of the unutilised excess positive film, retained by the assessee after processing customers' films, was effected in the course of the assessee's business and was therefore taxable as a sale in the course of business.

Analysis: The decisive test was whether the assessee carried on the business of selling that commodity, which depends on the intention to carry on such business and on the volume, frequency, continuity and regularity of transactions viewed with a profit-motive. Goods obtained merely as excess material in the course of another business do not become trading stock unless circumstances show an intention to deal in them. The unexhausted film was not purchased by the assessee for resale, was not a by-product or subsidiary product of the processing activity, and the limited transactions over the relevant years did not establish a business of selling such film. The excess film was retained only to meet wastage and processing contingencies, and the occasional sale of leftovers did not convert the assessee into a dealer in that commodity.

Conclusion: The sale was not in the course of the assessee's business and was a casual sale, not includible in the taxable turnover.

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