1968 (2) TMI 10

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..... ried on money-lending business in Rangoon and Colombo. On February 14, 1957, there was a partition at which the assets in respect of Rangoon and headquarters business were divided, and on March 31, 1957, there was a further partition in respect of the Colombo business. The assessee's total share at the partition was valued at Rs. 4,60,779 which included advances to individuals amounting to Rs. 1,36,209. Moieties in three immovable properties were among the assets which fell to his share. The first item was sold on August 29, 1958, and the second on January 9, 1959. The third item was a site at Rangoon a part of which was sold. The bulk of the first item was purchased by the joint family in settlement of a book debt in the course of its mone .....

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..... sessee. The profit received on sale of sale properties has gone to reduce the open debit balance in the money-lending account against kadai. Actually the income from the properties as well as the sale proceeds have been used in the money-lending business. The Tribunal in appreciating these facts was alive to the position that what the assessee took as his share at the family partition constituted a capital asset. But it said by virtue of the ploughing back " the income therefrom into advances to inams and other money-lending activities, it can be definitely said that the assessee had made these assets as part of his money-lending business ". Though the Tribunal referred only to the ploughing back of the income, in the context, it appears th .....

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..... ion that the intention of the assessee since he got the properties at the partition was to treat the same as part of his stock-in-trade in his money-lending business. It may be that if we were to sit in appeal, possibly we might have come to a different conclusion. But we have to see whether the Tribunal could not rely on it as material. We are unable to see why such user cannot be used as material for inferring an intention on the part of the assessee to treat the capital as part of his stock-in-trade. What the Tribunal has done amounts to this, namely, to infer from present user an intention on the part of the assessee to treat the properties as part of the stock-in-trade in the past since the partition. This fact based on the user of the .....

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