1984 (3) TMI 61 - HC - Income Tax

Summary

The High Court of Karnataka upheld the assessment of capital gains on the sale of rosewood trees by an HUF, ruling that the income from the sale of trees should be taxed as capital gains and not as business income. The court found that the sale of trees, even after dressing, did not change the nature of the income, as the trees were considered fixed assets. The Tribunal concluded that the transaction was an isolated sale of a capital asset, not a business activity, and the assessee failed to prove they were a timber dealer. The court ruled in favor of the tax assessment on capital gains.