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Issues:
1. Whether the ventures in question were ventures in the nature of trade. Analysis: The judgment delivered by the High Court of Madras, with Chief Justice Rajamannar and Justice Yahya Ali presiding, pertains to a case where the Income-tax Appellate Tribunal referred a question regarding the nature of ventures undertaken by the assessee, who is a partner in a firm of stock brokers in Madras. The assessee had sold shares on multiple occasions during the accounting year, resulting in significant profits. The Income-tax Officer treated these profits as arising from business activities, a decision upheld by the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal. The Court examined the assessee's history of buying and selling shares from 1936 onwards, noting the frequency and volume of transactions over the years. The Court emphasized that its role was not to independently determine if the assessee was engaged in a trading business but to assess if there was substantial evidence supporting the Tribunal's conclusion. The Court found that the Tribunal had sufficient grounds to infer that the assessee's share transactions were conducted with the intention of resale, indicating a business activity rather than mere investment. Referring to the precedent set in Californian Copper Syndicate v. Harris, the Court highlighted the distinction between ordinary investments and transactions conducted as part of a business venture. The judgment cited the principle that profits from the sale of investments may be subject to income tax if the activities constitute a business operation rather than a simple change in investment. The Court rejected the argument that the assessee's transactions were solely for investment purposes, drawing a parallel to a previous decision by the Allahabad High Court. In conclusion, the Court answered the question posed by the Tribunal in the affirmative, affirming that the ventures in question were indeed ventures in the nature of trade. The assessee was directed to bear the costs of the reference. The judgment provides a detailed analysis of the assessee's share transactions, the legal principles governing taxation of profits, and the application of precedents to determine the nature of the ventures undertaken by the assessee.
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