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Issues: Whether a doctor running a nursing home with plant and machinery, and carrying on activities that combined professional skill with commercial organisation, was engaged in a "business" so as to qualify for development rebate under section 10(2)(vib) of the Indian Income-tax Act, 1922.
Analysis: The definition of "business" in the Act is inclusive and therefore of wide amplitude. The activity undertaken by the assessee was not a mere exercise of professional skill in the narrow sense; it involved plant, machinery, assistants, expenditure, and an organised set-up producing gains in a manner bearing a commercial character. Where professional activity is interwoven with trading or business elements, the composite activity may properly be treated as business for fiscal purposes. The question whether the activity was business or profession was treated as a question of law on the facts found, and the conclusion of the revenue authorities that it lacked commercial character was held to be unsustainable.
Conclusion: The assessee was entitled to development rebate, and the question was answered in the negative but in favour of the assessee.
Ratio Decidendi: For income-tax purposes, an activity that combines professional skill with an organised commercial or trading element may be treated as "business", even if it springs from a profession, and the statutory benefit attached to business cannot be denied merely because the assessee is a professional.
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