Adventure in the nature of trade requires trading motive; an isolated compensation-claim transaction was held non-taxable as business profit.

A solitary purchase and adjustment of an evacuee compensation claim was held not to constitute an adventure in the nature of trade, because the assessee's earlier business in such claims had long closed and the transaction was isolated, unrepeatable and ultimately used to acquire a house. The surrounding facts disclosed no trading character or profit-making scheme, and the Tribunal's factual finding was supported by the record. The resulting surplus was therefore treated as a casual, non-recurring receipt and not taxable as business profit.

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Issues: Whether the surplus arising from the single transaction of purchase and adjustment of the compensation claim constituted profit from an adventure in the nature of trade, or a casual and non-recurring receipt not exigible to tax.

Analysis: The assessee had earlier been connected with a business of purchase and sale of evacuee compensation claims, but that business had closed several years before the relevant year. The transaction in question was a solitary purchase, was not repeated in the accounting year or thereafter, and was ultimately utilised for acquiring a house. Although a single transaction can in appropriate circumstances amount to an adventure in the nature of trade, the surrounding facts did not disclose any trading character or profit-making scheme. The determination depended on the factual setting and the Tribunal's finding on those facts was supported by the record.

Conclusion: The receipt was not income from an adventure in the nature of trade and was not taxable as business profit; the question was answered in the affirmative and against the Revenue.

Final Conclusion: The assessee succeeded, and the taxability of the amount as trading profit was rejected.

Ratio Decidendi: A solitary transaction does not become an adventure in the nature of trade unless the facts disclose a trading motive or commercial character; where the transaction is isolated and lacks such indicia, the resulting surplus is not taxable as business profit.

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