Capital accretion on dry dock sale was not business profit, as the trading motive was not established on the facts.

Surplus from the sale of the dry dock was treated as capital accretion rather than taxable business profit from an adventure in the nature of trade. The court assessed the transaction by considering the total effect of all relevant circumstances, not by isolating any single factor. The partnership's stated object was to operate the dry dock for inspection, repair and overhaul of ships, and it took substantial steps to secure facilities for that business. Attempts to sell the dock and the existence of commission arrangements did not, by themselves, show a trading motive. The sale occurred only after the intended business could not be carried on because the necessary facilities were not obtained.

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Issues: Whether the surplus arising from the sale of the dry dock was assessable as profits from an adventure in the nature of trade.

Analysis: The transaction had to be judged on the total effect of all relevant factors and circumstances, not by isolating one circumstance or merely counting factors for and against trade. The evidence showed that the partnership was formed with the stated object of running and operating the dry dock for inspection, repair and overhaul of ships, and substantial steps were taken to secure a berth and workshop at Kandla for that purpose. The fact that attempts were also made to sell the dock and that commission arrangements existed for a possible sale did not, by itself, establish that the partnership was formed solely to resell the dock at a profit. The sale ultimately occurred only after the intended business could not be carried on because the necessary facilities were not obtained. The later statement of Bretagne was not given controlling weight because it conflicted with the earlier documentary record and surrounding circumstances.

Conclusion: The surplus realised on sale was capital accretion and not taxable business profit from an adventure in the nature of trade.

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