TaxTMI 
TaxTMI 
1969 (2) TMI 35
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....August 6, 1960, 37 shares in that company and sold the same at a profit on December 5, 1960, to the brother-in-law and wife of one Chinnaswami Pillai, the managing director of the very same company. Two of this gentleman's daughters were also directors, all the three of whom together held 200 shares as on August 5, 1960. His son possessed 42 shares which he had purchased from one Sundaralinga Asari. On August 6, 1960, one L. G. Varadarajulu, the brother-in-law of the assessee, transferred 45 shares to his brother's wife and 50 shares to the wife of another brother of his. On December 5, 1960, the assessee sold 30 shares to Karupaiah Pillai, said to be the brother-in-law of Chinnaswami Pillai, and 7 shares to the latter's wife, Angammal. As ....
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....kind. We do not think it necessary, therefore, to deal with them at any length. So far as we are aware, nobody has defined trade exhaustively or precisely, nor is it wise or possible to do it. But, at the same time, it is a term well understood by the mind and so too is the case with an adventure in the nature of trade. In Sarojini Rajah v. Commissioner of income-tax, reference was made to the considerations that bear upon the identification of badges of trade, to wit, the subject-matter of the realisation, the length of the period of ownership, the frequency of a number of similar transactions by the same person, supplementary work on or in connection with the property realised, the circumstances that were responsible for the realisation a....
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....tion is a matter of inference from the other facts. It is here the badges of trade indicated by the Royal Commission earlier referred to be of assistance. The subject-matter of a transaction may be such as is commonly or usually dealt with in trade or commerce. For instance, often stocks and shares by their nature are transacted as a commercial deal, though occasionally there may be investment as such in shares and stocks. The length of their holding may perhaps be suggestive of the character of the holding. If the stocks purchased are held over a long number of years, it may be reasonable to conclude that it is a case of investment. But if there is frequency in the purchase and sale of shares in the course of a person's activities, that ma....
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....ing director and his group of shareholders attempted or would attempt to acquire all the available shares in order to concentrate the power of the private company as much as possible in their hands and thus there would be a demand for the shares held by other shareholders. Taking all these facts into account, the cumulative effect of them, to our minds, is that the transaction of sale cannot be said to be merely a conversion of one form of asset into another giving rise to capital gain. At any rate, we do not feel justified to differ from the conclusion of the Tribunal, in the circumstances, that the transaction was an adventure in the nature of trade. Learned counsel for the assessee took one or other of the circumstances we have mentione....