Bhimasankaran, J .
(1) This reference is made at the istance of this assessee and the question to be answered by in is formulated as follows :
'Whether the sum of Rs. 75,040/- is a receipt not from business but only of a casual and non-recurring nature exempt under S. 4(3)(vii), Income-tax Act ?'
(2) Having regard to the nature of the question, it is necessary to state the material facts which have a bearing on the character of the transaction leading to the receipt by the assessee of the sum in question. The assessee is a trader interested in several lines of business. He does business in timber, tiles, furniture, ironware and hardware, some in partnership with others and some entirely on his own. He also owns seagoing schooners and other boats jointly with others which are plied for transaport of cargo as well as passengers. He belongs to a family of bankers and traders, he and his brothers having been described by the Appellate Assistant Commissioner of Income-tax as being the foremost business man of Masulipatam.
On 29.8.1941, by a registered deed of transfer, he purchased for a sum of Rs. 62,500/- a 25/26th share in a final mortgage decree for sale. His assignors were one Mutha Sarvarayadu and his sons. The decree itself was for a sum of above Rs. 2,60,527/-. It is recited in the assignment deed that Sarvarayadu and his sons were in embarrassed circumstances, that they were under pressure to meet the demands of their creditors, that the execution of the decree was stayed under the provisions of the Madras Act 4 of 1938 pending an application for scaling down of the decretal debts, and that as there was no immediate prospect of realising their share of the decretal amount, they were transferring their interest in the decreeto the assessee with a direction to him to pay off their creditors.
The assessee also undertook to pay off his assignors the balance, if any, that might be still outstanding with him alter the discharge of their obligation. To enable him to pay the creditors of the assignors, it appears that the assessee borrowed some moneys at interest from his brother Venkatasubba Rao and one Nagapotha Rao, both of whom are bankers and money-lenders by profession. By October 1943, the assessee had paid off all the debts he had undertaken to pay and on 29.5.1944 he paid the balance of consideration still due to the assignors. In the meanwhile, he instituted proceedings in court for the execution of the decree and brought to sale some of the mortgaged properties. As a result of the execution proceedings, the assessee realised on 14.8.1944 a sum of Rs. 1,51,540/- for his share of the decree.
The amount, so realised exceeded the price paid by him for the purchase of the decree by a sum of Rs. 89,040/-. Deducting the sum of Rs. 10,000/- for the expenses of realisation and another sum of Rs. 4,000/- which the assessee had to pay his assignors by way of interest from the above sum, the Income-tax Officer treated the balance of Rs. 75,040/- as gains or profits of an adventure or concern in the nature of trade and computed it in the assessment year 1945-46 as part of the income of the assessee in the previous year ending with 31.12.1944. Before the Income-tax Authorities and the Appellate Tribunal, the assessee contended unsuccessfully that this sum is not a receipt arising from business and is only one of a casual and non-recurring nature coming within the exemption of S. 4(3)(vii).
(3) Before we consider the contentions raised on behalf of the assessee we would like to observe that, in our view, the issue raised is essentially one of fact. Unless the finding thereon is vitiated by a wrong view of the law, by consideration of inadmissible evidence or refusal to consider admissible evidence, it is not open to sub-stitute a finding of our own for that of the ultimate Tribunal of fact, though we might ourselves be inclined to come to a different conclusion on the same evidence.
(4) Three main submissions have been made before us on behalf of the assessee. It is argued in the first place that in order that any transaction may be an adventure in the nature of trade or commerce, it must form one of the series of similar transactions. On this view, no single or isolated transaction can ever be an adventure of the required character. Apart from authority, it seems to us that the very language of the enactment militates against any such interpretation 'Business' has been defined as including '.................. any adventure or concern in the nature of trade, commerce or manufacture'. It is common ground that tax is leviable on all receipts from business. The words 'any adventure' clearly comprehend in our judgment even a single venture or an isolated transaction. There is also authority negativing the construction sought to be put upon the language by the counsel for the assessee in -- 'Mrs. D. M. Alexander v. The Commissioner of Income Tax, Madras', : 22ITR379(Mad) (A), where their Lordships of the Madras High Court state :
'Even a single venture may amount to business and the profits of such a single venture may be taxable as income arising from business.'
A Full Bench of the Lahore High Court expressed the same view in -- 'Behari Lal Jhandumal', In re : AIR 1944 Lah 287 (B), and Muhammad Munir J., observed at page 291 of the report as follows :
'If Mr. Kirpa Ram Bajaj's argument is that an isolated venture cannot be a venture in the nature of trade, the position is untenable because in the present state of authorities the proposition that an isolated transaction may be a venture in the nature of trade is too well-established to admit of any doubt.'
We do not think it necessary to refer to other cases cited. The other contention urged on behalf of the assessee was that this particular transaction had nothing to do with the several lines of business in which the assessee was interested and therefore it could not partake of the nature of trade. We cannot accede to the contention either. The definition does not say that the particular venture or a transaction should be in the nature of trade usually carried on by the assessee. It is enough if it is in the nature of trade in general, though as we shall show in the course of our discussion later, whether it is or is not akin to the assessee's line of business may be a factor to be taken into consideration in arriving at a finding.
(5) The third argument urged on behalf of the assessee was that the assessee had no profit motive in entering into the transaction and that he was actuated by one or both of two motives, viz., (a) to help Sarvarayadu and his sons out of their financial embarrassment and (b) to help his own brothers who had purchased the equity of redemption in two of the village included in the mortgaged property by ensuring that the execution of the decree was confined to the other properties. It is unnecessary for us to deal with this contention because the Tribunal as well as the Income Tax Authorities refused to accept the evidence in support of this case. We may now state what, in our opinion consitute relevant factors in arriving at a conclusion of fact on the question as to whether a particular transaction is or is not an adventure in the nature of trade or commerce and what is the nature of the thing to which the transaction relates.
Could its acquisition have been for use or enjoyment in the ordinary way A man may buy a horse, a book or a peice of land. They may be for use or enjoyment by himself. If a man buys a decree for instance, as in this case, it is impossible to say that the subject matter of purchase is for use and enjoyment. The scale of the transaction is also a maeterial factor. If a man goes into the market and buys an immense quantity of a metal or cotton or toilet paper as in the case of -- 'Commissioners of Inland Revenue v. Livingstone', (1927) 11 Tax Cas 538 (C), it would not be natural and reasonable to suppose that the thing purchases was for personal use. The purpose, the motive or intention in enterting into the transaction will also be a proper matter for consideration. One may buy a thing merely because it is going cheap with the remote intention of making a profit at an opportune time. In such a case, he may not be in the phrase of Lord President Clyde 'Plunging into the waters of trade' vide -- 'Balgownie Land Trust Ltd. v. Commissioner of Inland Revenue', (1929) 14 Tax Cas 684 (D).
Then again the relation of a particular transaction to the ordinary business of the assessee would be a proper element to be taken into account. If it is clearly connected with the assessee's normal business, the determination of the question would, of course, be easy. It would then be manifestly stamped with the qualities of trade. Further the question may also be asked : Is the receipt arising out of the transaction in the nature of windfall, of a casual and non-recurring nature and not properly describable as arising from ahy business or trade If a man draws a prize at a lottery, or makes a profitable bet or wins a prize in a Crossword Competition, as it is called, the receipt could scarcely be described as arising from any business.
Still another question which would have a bearing on the matter would be : Is it an investment i.e., is the money laid out in buying a thing expected to fetch a regular periodical return A lawyer may buy a share certificate or a debenture in a company. There would be no presumption in such a case that the share or debenture was purchased with the sole object of re-selling at a profit. On the other hand, if a person regularly dealing in shares does so, surely it would be a piece of business. The nature of the operations involved in acquiring and disposing of a thing may also be relevant. It is true that a consideration of all these questions may not be necessary in deciding a particular case. A clear answer to one or other of the questions thus raised may be decisiveother of the questions thus raised may be decisive in some cases. But all or some of them would have to be answered in many cases.
It the present case, what is purchased is a decree. As stated above, the very nature of the subject-matter precludes its acquisition for use or enjoyment. Of course, it is conceivable that a man may purchase a decree to accommodate the decree-holder or the Judgment - debtor, or it may be evento harass or annoy the one or the other of them, but such a motive has been ruled out in this case. The transaction cannot be described as one of speculation like a bet or buying a ticket in a lottery. It is clear case of laying out money with a view to reap a profit. This material element has been found by the Tribunal.
It is in no sense an investment because as shown above, it could not yield a regular and periodical return. That being so, we are of the opinion that there was evidence before the Tribunal on which they could arive at the conclusion which they reached. They learned counsel for the assessee has drawn our attention, however, to a case reported in -- 'Gangaraju v. Commissioner of Income Tax', AIR 1935 Mad 387 (E). It is true that the facts of that particular case are very near to the facts of the present case. But we are satisfied that their Lordships did not intend to lay down any rule of law in deciding that case. The question therefore, referred to us is answered in the negative. The assessee will pay the costs of Commissioner which we fix at Rs. 250/-.
(6) Answer in negative.