Adventure in the nature of trade requires full facts; surplus on plant transfer remains taxable under governing principle.

Where a transaction's character as an adventure in the nature of trade depends on the total effect of relevant facts, the issue cannot be conclusively answered if the Tribunal has not considered all primary material; the matter must be remitted for fresh decision on a complete factual record, including alternative pleas on revenue receipts and capital gains. In contrast, profit on transfer of plant and machinery under section 10(2)(vii) was held taxable on the governing principle stated in Commissioner of Income-tax v. B. M. Kharwar, and the contrary Tribunal view could not stand.

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Issues: (i) Whether the Tribunal's finding that the transfer of mining rights and related assets was not an adventure in the nature of trade could be answered on the material before the Court, or whether the matter had to be sent back to the Tribunal for fresh decision. (ii) Whether any profit arose under section 10(2)(vii) of the Indian Income-tax Act, 1922 on the transfer of plant and machinery.

Issue (i): Whether the Tribunal's finding that the transfer of mining rights and related assets was not an adventure in the nature of trade could be answered on the material before the Court, or whether the matter had to be sent back to the Tribunal for fresh decision.

Analysis: The Tribunal had not set out or evaluated all the relevant primary facts and had proceeded on an incomplete factual basis. The character of the transaction depended on the total effect of all relevant circumstances and was a mixed question of fact and law. Since the statement of case was deficient and the Tribunal had misdirected itself by not considering the full material, the Court could not finally answer the question on merits.

Conclusion: The matter was remitted to the Tribunal for decision on merits after considering additional evidence, including the alternative pleas relating to revenue receipts and capital gains.

Issue (ii): Whether any profit arose under section 10(2)(vii) of the Indian Income-tax Act, 1922 on the transfer of plant and machinery.

Analysis: The assessee accepted that this question was governed by the Supreme Court's ruling in Commissioner of Income-tax v. B. M. Kharwar, which had disapproved the Tribunal's basis for excluding the profit on transfer of plant and machinery. On that authority, the surplus was taxable and the Tribunal's contrary view could not stand.

Conclusion: The question was answered in the negative and against the assessee, in favour of the Revenue.

Final Conclusion: The reference succeeded only in part: the issue relating to section 10(2)(vii) was decided for the Revenue, while the main controversy regarding the nature of the mining-rights transaction was sent back for reconsideration by the Tribunal.

Ratio Decidendi: Where the Tribunal has not considered all relevant primary facts, a question turning on whether a transaction is an adventure in the nature of trade cannot be conclusively answered in reference jurisdiction and must be remitted for decision on a complete factual record; a surplus on transfer of plant and machinery is taxable where the governing legal principle so requires.

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