Adventure in the nature of trade: acquisition, subdivision, and resale of estate profits treated as taxable income.

A single transaction can constitute an adventure in the nature of trade where the surrounding facts show a commercially organised scheme for profit. The assessee's acquisition of a rubber estate, its subdivision into plots, and the finding of purchasers for most plots supported the conclusion that the surplus arose from a trading venture rather than a mere realisation of capital. The facts also undermined the explanation that the assessee played no role in the resale arrangements. The surplus was therefore treated as profit from an adventure in the nature of trade and assessed to income-tax.

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Issues: Whether the surplus arising from the assessee's purchase, subdivision, and resale arrangement in the rubber estate constituted a venture in the nature of trade and was assessable to tax.

Analysis: The arrangement began with the assessee's agreement to purchase the estate and payment of advance, and ended with the conveyance of the estate after the assessee had divided it into plots and found purchasers for most of them. The transaction showed the essential features of a trading venture, and the financial benefit obtained by the assessee represented profit from that venture. The facts also negatived the assessee's explanation that he had no role in the resale arrangements.

Conclusion: The surplus was rightly treated as profit from an adventure in the nature of trade and was assessable to income-tax. The question was answered in the affirmative, against the assessee and in favour of the Revenue.

Ratio Decidendi: A single transaction may amount to an adventure in the nature of trade where the surrounding facts show a commercially organised scheme for profit, including acquisition, subdivision, and realisation through resale.

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