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of <h1>Court rules profit from grain sale taxable as business income</h1> <h3>Indrajit Singh Versus Commissioner Of Income-Tax</h3> The High Court held that the sale of food grain received on partition constituted an adventure in the nature of trade, justifying the taxation of the ... A Partner, Adventure In The Nature Of Trade, Carrying On Business, Partner In Firm Issues:1. Taxability of income from the sale of food grain received on partition as an adventure in the nature of trade.2. Determination of whether the transaction constituted an adventure in the nature of trade based on the evidence on record.Analysis:The case involved the assessment of an individual assessee for the year 1968-69 who sold grain received on partition for Rs. 60,857. The assessee claimed the grain was exempt under section 10 of the Income-tax Act as agricultural produce. However, the Income-tax Officer treated the transaction as an adventure in the nature of trade, computing a profit of Rs. 38,880. The Appellate Assistant Commissioner and the Tribunal upheld the decision. The assessee then sought reference of legal questions to the High Court.Upon review, the High Court considered the Supreme Court decisions in Raja Bahadur Kamakhya Narain Singh v. CIT and Khan Bahadur Ahmed Alladin and Sons v. CIT. The court noted that the assessee was a partner in a firm dealing with grain and had kept the received grain with another grain-lending firm. The court emphasized that the intention to make a profit from the grain indicated an adventure in the nature of trade. Referring to Bhagirath Prasad Bilgaiya v. CIT, the court highlighted the continuous transactions and business-like operations involved.Consequently, the High Court held that the sale of the food grain constituted an adventure in the nature of trade, justifying the taxation of the profit. The court found no error in the decisions of the assessing authority and appellate authorities. Therefore, the reference was answered against the assessee and in favor of the Revenue, affirming the taxability of the income from the grain sale received on partition.
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