Isolated property resale held not to be trading activity where facts showed investment intent, not commercial venture.

An isolated purchase and partial resale of property was held not to constitute an adventure in the nature of trade where the assessee was not in the land-dealing business, retained most of the land, and no surrounding facts showed an intention from inception to buy for resale at a profit. Financing the acquisition partly through sale of a portion and partly by overdraft was not sufficient, by itself, to convert the transaction into trading activity. The court treated the acquisition as a prudent investment rather than a commercial venture, and the resulting profit was not taxable as business income.

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Issues: Whether the purchase and sale of part of the property constituted an adventure in the nature of trade, so that the resulting profit was taxable.

Analysis: The assessee was not in the business of dealing in land and the transaction was a solitary and isolated act. Only a part of the property was sold, while the bulk of the land remained with the assessee. The surrounding facts did not disclose any valid circumstance showing an intention, from the inception, to purchase the property for resale at a profit. Financing the purchase partly by sale of a portion of the property and partly by overdraft was not, by itself, sufficient to convert the transaction into trading activity. The decisive test was the intention with which the property was acquired, and the facts indicated a prudent investment rather than a commercial venture.

Conclusion: The transaction was not an adventure in the nature of trade and the profit was not taxable as business income.

Final Conclusion: The reference was answered against the Revenue, and the assessee succeeded on the taxability issue.

Ratio Decidendi: An isolated purchase and resale of property does not amount to an adventure in the nature of trade unless the surrounding facts clearly establish an intention to acquire the property for resale at a profit.

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