Isolated silver resale without trading activity is not an adventure in the nature of trade for tax purposes.

A single purchase and resale of silver from capital funds was held not to be an adventure in the nature of trade under the income-tax definition of business. The decisive test was whether the transaction was carried on in the manner of ordinary trading; here, there were no trading operations, no steps to make the silver marketable, and no evidence of any business in silver. Mere intention to resell at a profit, or the speculative character of the purchase, was insufficient by itself to establish business income. The receipts were therefore treated as not arising from business.

---

---

Issues: Whether the receipts from the resale of silver arose from business, i.e. from an adventure in the nature of trade, within the meaning of section 2(4) of the Income-tax Act.

Analysis: The transaction was a single purchase and resale of silver by the assessee from capital lying in her bank account. No trading operations were carried out on the silver after purchase, no steps were taken to convert it into a marketable commodity, and there was no evidence that the assessee carried on any business in silver. Mere intention to resell at a profit, or the fact that the purchase was speculative, was held insufficient by itself to constitute an adventure in the nature of trade. The decisive question was whether the operations were carried on in the same way as ordinary trading, and the record disclosed no such trading activity.

Conclusion: The receipts did not arise from business and the isolated silver transaction was not an adventure in the nature of trade. The question was answered against the Revenue and in favour of the assessee.

Ratio Decidendi: A mere isolated speculative purchase and resale, without trading activity or business-like operations, does not by itself amount to an adventure in the nature of trade.

---