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TMI Blog1962 (3) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... other for money-lending. But inter-connecting the two sets of accounts, there is a current account. As already stated, during the course of money lending- business, the assessee acquired certain agricultural properties. After the acquisition of those properties in lieu of debt, the account of the debtor in money lending-business was closed, and the agricultural property account in the other set of books was debited in the amount of debt due from the debtor. In the account pertaining to the agricultural properties, the day to day expenses for agricultural operations were entered. Similarly, the income derived by the sale of agricultural produce was credited to that account. At the close of the year, the balance in this account was taken to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and held that the lands were his stock-in-trade and, therefore, the profit derived by the assessee on the sale of these lands were taxable. Further appeal taken by the assessee to the Tribunal failed. On an application made by the assessee, the Tribunal has drawn up the statement of the case and referred to us the following question of law : Whether, on the facts and circumstances of the case, the sum of ₹ 10,305 can be considered to be income liable to be assessed ? 2. Mr. Terdalkar, who appears for the assessee, contends that the revenue authorities as well as the Tribunal were in error in holding that these lands were stock-in-trade of the assessee. On the other hand, according to Mr. Terdalkar, the circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in lieu of his debts due from Lala Lachhman Das. 3. Now, it is indeed true that the mere fact that landed property was acquired in the course of money lending business is not sufficient to hold that it is the stock-in-trade of the money-lender. But it is equally true that whether a particular landed property acquired by a money-lender is his capital asset or a trading asset is always a question of fact to be determined on the facts of each case, depending on the manner in which the money-lender deals with the property after acquiring it in course of money lending. The passage on which reliance is placed by Mr. Terdalkar is not the conclusion reached by the learned judges deciding the case, but is only the passage form a judgment of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of investment in Immovable property without any intention of making it a part of the assets of the business. 4. From the said observations, it is clear that if the income of the property acquired during the course of the business is used for the purposes of the business, then it is stock-in-trade of the business and not a capital asset of the assessee. The principle has been very emphatically stated in a Federal Court decision in A. H. Wadia, as Agent of the Gwalior Durbar v. Commissioner of Income Tax by Mahajan J., as he then was, in the following terms : It was a question of fact that had to be determined in this case whether the properties after they were purchased, or their income were still a part of the assets used by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these properties were the stock-in-trade of the assessee. This finding of fact, therefore, is not, in our opinion, open to challenge. 7. The circumstance on which reliance has been placed by Mr. Terdalkar, viz., that the properties were held by the assessee for a number of years, and they were sold on account of tenancy legislation, have not been left out of consideration by the Tribunal, but have been taken into account by it, and after considering these circumstances along with other evidence on record, the Tribunal has reached its conclusion. It, therefore, also cannot be said that the finding of the Tribunal that the lands were the stock-in-trade of the assessee is in any manner vitiated. 8. In the result, our answer to the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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