Adventure in the nature of trade can tax an isolated decree transaction when profit-making intent and realisation steps dominate.

A profit from purchase and realisation of a share in a mortgage decree is treated as business income where the asset is acquired for profit-making and exploited through a calculated, business-like course of conduct. The transaction is not a mere investment or casual receipt if the asset can only be turned to account by realisation and the dominant intention at acquisition is profit. Even an isolated venture may amount to an adventure in the nature of trade. On that footing, the casual and non-recurring receipt exemption under section 4(3)(vii) of the Indian Income-tax Act, 1922 does not apply.

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Issues: Whether the profit arising from the purchase and realisation of a share in a mortgage decree was a receipt from an adventure in the nature of trade and therefore taxable, or whether it was exempt as a casual and non-recurring receipt.

Analysis: The assessee purchased the decree for a relatively low price, borrowed funds to finance the acquisition and the expenses of realisation, and then pursued a planned and sustained course of steps through execution proceedings to recover the full value. The transaction was not an investment capable of yielding enjoyment or income while held, but an asset that could be turned to account only by realisation. The claimed altruistic purpose was rejected on the evidence, and the dominant intention at the time of acquisition was found to be profit-making. The fact that the venture was solitary did not prevent it from being a trading adventure. The statutory exemption for casual and non-recurring receipts did not apply to a profit arising from such an adventure in the nature of trade.

Conclusion: The receipt was taxable as business profit arising from an adventure in the nature of trade and was not exempt under section 4(3)(vii) of the Indian Income-tax Act, 1922.

Final Conclusion: The reference was answered against the assessee, and the profit was held assessable to tax as trading income.

Ratio Decidendi: Where an asset is acquired and exploited through a calculated, business-like course of conduct with the dominant intention of making a profit, the resulting gain is an adventure in the nature of trade even if the transaction is isolated and the asset is not part of the assessee's ordinary business.

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