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TMI Blog1952 (9) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... rty of the company and to sell and to realise the proceeds of sale of any movable or immovable property of the company. Though according to clauses (c) and (g) the objects of the company included acquisition of movable and immovable property which may seem calculated to ensure advantage to the company and to sell, improve, manage, develop, exchange, lease, mortgage, dispose of, turn to account or otherwise deal with all or any part of the property of the company, the assessee was not actually carrying on these activities as a business. In the course of its business, however, the assessee was advancing loans and one of the loans advanced was a sum of ₹ 38,000 at an interest of 6 per cent. per annum as an overdraft to the Rohelkhand Ice Factory. The interest was charged at a reduced rate of 5 per cent. per annum after a certain period. This loan kept on mounting up and in order to discharge the loan, the Rohelkhand Ice Factory entered into an agreement with the assessee transferring its 3/4ths interest in the shares and assets etc., including lands, buildings, and godown of the Match Factory at Bareilly for a consideration of ₹ 75,000. An additional sum of ₹ 1,219- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal has, on the above facts, referred the following two questions:- (i) Whether on the above statement of the case and on the construction of its Articles of Association the transaction of purchase of the Match Factory and the subsequent sale of its premises in different bits could legally be held to be a transaction entered into by the applicant in the course of its money-lending business ? (ii) Whether in the circumstances of the case, the receipts of the applicant by the resale of the premises of the Match Factory were revenue receipts or capital receipts? Mr. Pathak, learned counsel for the assessee, has addressed arguments at great length to us to make out that this purchase of the property by the assessee and its resale in bits were not in the course of the business of the assessee of "acquiring or selling immovable property" nor was it an adventure in the nature of a trade and consequently the income which arose out of this transaction should not be treated as a revenue receipt. His contention was that this sum of ₹ 28,879 had accrued as profit on a capital investment as a result of the appreciation of the value of property acquired as capital so that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent paragraph to state their own conclusions as a finding of fact. Presumably, the Commissioners mean to say that they deduce from the facts which were proved or admitted the three conclusions stated in paragraph 5, and that they regard these conclusions as matters of fact. No doubt there are many cases in which Commissioners, having had proved or admitted before them a series of facts, may deduce therefrom further conclusions which are themselves conclusions of pure fact. But in such cases the determination in point of law is that the facts proved or admitted provide evidence to support the Commissioner's conclusions". There can be no doubt that when inferences have to be drawn from facts proved, the question whether those inferences could or could, not be drawn can be a question of law. The function of this Court in examining the finding of an Income-tax Tribunal under such circumstances were very clearly brought out by one of us in the case of Lalit Ram Mangilal of Kanpur's case (supra)where it was held :- "Certain facts are proved by direct or circumstantial evidence and these findings might be called the primary findings of facts. It is not disputed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt them as payment towards their loan under circumstances which indicate that this was the only means of realising that loan. 3. That the property was accepted in lieu of the loan at a time when the value of such property was rising in the market and it was felt that this was probably the only means by which either the loss could be cut down or a profit earned on that transaction. 4. That the assessee had a rooted objection to investing money in immovable property so much so that the assessee did not buy buildings for the purpose of housing its various branches. It appears impossible for us to say that on these primary facts found by the Tribunal, the Tribunal could not have arrived at the inference that the acquisition and sale of this property by the assessee were merely steps in the transaction of advancing and realising its loan which had been advanced to the Rohelkhand Ice Factory in the course of its business of money-lending. As soon as the assessee found it possible, the property which had been accepted in lieu of the loan was converted into cash by sale of that property. We cannot see any force at all in the contention that this property was taken as an investment of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising the loan from that factory. Any amount realised in excess of the amount due from the factory on the loan was, therefore, income arising from a transaction of money-lending business. Learned counsel, in this connection, referred us to a decision of this very Bench in Gurucharan Prasad Jagannath Prasad v. Commissioner of Income-tax, U.P. and Ajmer Merwara [1951] 19 ITR 42 . The facts in that case were, however, quite different. In that case, the most Important circumstance that was found was that the assessee had received the properties in the year1923 and they were sold in the year 1941. The assessee had kept those properties with him for a period of eighteen years. During that period, the properties or their value were not available to the assessee for carrying on money-lending business and it was held that his retention of the property for such a long period clearly indicated that he treated these properties as his own property which had been received by him in satisfaction of his debts due from his debtor. He did not convert the properties almost immediately into cash for the purpose of carrying on his money-lending business. There was a further fact that the assessee had c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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