1961 (8) TMI 51

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..... purchased by the family in lieu of outstanding due. They undoubtedly formed part of the stock-in-trade of the business. The family also earned profits by buying and selling immovable properties. In such cases properties used to be purchased for cash. It can, therefore, be said that the family did business in buying and selling properties in addition to their principal business of money-lending. All such purchases of properties were recorded in the books of the money-lending business with separate folio for each property in which the working expenses and the income therefrom were also entered. When properties were sold, profits and losses resulting from such sales were included in the profit and loss account of the business. On 7th November .....

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..... y for sale. The profits in respect of these four items during the year of account amounted to 6,136 dollars. The assessee submitted that he was liable to pay income-tax on the profits of 4,273 dollars but that he was not so liable in regard to the profit of 6,136 dollars as the latter represented only a capital receipt. The income-tax Officer did not accept that contention; he discounted the assessee's story on the ground that it was difficult to believe that the assessee would have thought of investing the surplus funds in Malaya except for the purchase of the business. On appeal the Appellate Assistant Commissioner was of the opinion that the properties in question having been received by the assessee at a partition of the family they .....

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..... did doubt form the stock-in-trade of the business. But the point which arises for consideration in the present case is not so much as to what the character of the property was in the hands of the undivided Hindu family but what its character was in the hands of the assessee after partition. The stock-in-trade of the business relating to purchase and sale of properties did not, on the closure of such business, become automatically the stock-in-trade of the money-lending business. It would certainly be open to the department to show that by conduct or otherwise the assessee had treated even those properties as part of the stock-in-trade of the money- lending business; but this has not been done in the present case. The attempt of Mr. Rangana .....

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