2013 (3) TMI 327 - HC - Income Tax

Profit on purchase and sale of gold bonds - whether be treated as the investment? - Held that - The Tribunal recorded a finding that the intention of the assessee was not to trade in gold bonds taking into consideration the audited accounts of the company and the annexures attached to the balance sheets. It also considered the resolution passed by the company about investment. The finding recorded by the Tribunal that it was not a case of trade in buying and selling of gold bonds. Except one transaction of purchase and sale, there is no other transaction during the previous year - the finding recorded by the Tribunal is essentially a finding of fact - against the revenue.

Summary

Issues:
1. Whether the profit on the purchase and sale of gold bonds should be considered as pertaining to investment or trading receipt for the Assessment Year 1982-1983.

Analysis:
The case involved a private limited investment company that received a gift of gold bonds and subsequently purchased additional gold bonds. The Assessing Officer treated the profit from the sale of the gold bonds as a trading receipt and imposed tax accordingly. The matter was appealed, and the Tribunal found that the initial purchase was made with the intention of investment, not trading. The Tribunal considered various factors, including the company's audited accounts, balance sheets, and investment resolution, to conclude that the company did not engage in trading of gold bonds except for one transaction during the year.

The Tribunal's finding was based on a thorough examination of the facts and circumstances of the case, leading to the conclusion that the company's actions did not amount to trading in gold bonds. The Court upheld the Tribunal's decision, emphasizing that the finding was essentially a finding of fact. Therefore, the Court answered the question in the affirmative, ruling against the revenue and in favor of the assessee.