Adventure in the nature of trade found where partitioned grain was held and sold as a commercial transaction

Sale of grain received on partition was treated as an adventure in the nature of trade where the assessee's association with grain dealings, the manner of holding, and long retention of a perishable commodity showed a profit-making commercial transaction. The grain was not regarded as agricultural produce from the assessee's own operations, so the agricultural income exemption failed and the resulting profit was taxable.

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Issues: Whether the sale of food grain received on partition constituted an adventure in the nature of trade and whether the resulting profit was taxable.

Analysis: The assessee received grain on partition and later sold it after retaining it with a firm engaged in grain and grain-lending business. The decisive factors were the assessee's business association with grain dealings, the manner in which the grain was held, and the long retention of a perishable commodity with a view to profit. On these facts, the transaction was not treated as the sale of agricultural produce from the assessee's own agricultural operations, but as a commercial transaction exhibiting the character of trade. The exemption claim under the agricultural income provision therefore failed.

Conclusion: The transaction was correctly held to be an adventure in the nature of trade and the profit was rightly taxed, against the assessee.

Ratio Decidendi: Whether a transaction is an adventure in the nature of trade depends on the total impression of the relevant facts and circumstances, including commercial association, manner of holding, and profit-making intention.

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