Adventure in the nature of trade can arise from a single transaction when facts show a profit-making venture.

A single isolated purchase and enforcement of a decree may still amount to an adventure in the nature of trade if the surrounding facts show a profit-making venture. The court treated the nature, scale, purpose and method of the transaction, together with the absence of use or enjoyment and the absence of a regular return, as relevant indicators. On the facts found, the surplus realised from the decree transaction was taxable as business income and not exempt as a casual and non-recurring receipt under Section 4(3)(vii) of the Income-tax Act, 1922.

---

---

Issues: Whether the surplus realised by the assessee on the purchase and enforcement of a decree was a receipt from an adventure in the nature of trade, or a casual and non-recurring receipt exempt under Section 4(3)(vii) of the Income-tax Act, 1922.

Analysis: The character of such a transaction depends on the surrounding facts and is primarily a question of fact. An isolated venture may still amount to business if its nature, scale, purpose, and method show that it was entered into with a view to profit. The nature of the subject-matter, the absence of use or enjoyment, the absence of a regular return, and the finding that the transaction was not a mere investment or windfall were relevant factors. On the facts found, there was evidence to support the conclusion that the purchase of the decree was a venture in the nature of trade.

Conclusion: The receipt was held to be taxable as business income and not exempt as a casual and non-recurring receipt.

Ratio Decidendi: A single isolated transaction may constitute an adventure in the nature of trade where its objective and surrounding circumstances show a profit-making venture rather than a casual receipt or investment.

---