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TMI Blog1978 (3) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... Goyal, the assessee in the present case. Only eighteen days later, namely, on 28th January, 1965, Ramesh Chand and the assessee entered into an arrangement under a written document, which is called a deed of sub-partnership. It began by saying that " the assessee was insistent upon getting his money back for the sake of better investment ...... " This statement comes in the partnership deed only after eighteen days of the money being lent to Ramesh Chand. The sub-partnership consisted of only two partners, namely, Ramesh Chand and the assessee. This sub-partnership was only in respect of the share of profits of Ramesh Chand in the principal partnership. Both the partners were to have a half share in the 40% share of Ramesh Chand in the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sum of Rs. 20,000 did not represent either revenue income or capital gains. He deleted this amount. The ITO went up in appeal to the Tribunal. The Tribunal did not agree with the AAC. It held that the transaction with Ramesh Chand was an ordinary trading contract incidental to the money-lending business carried on by the assessee. The receipt of Rs. 20,000 was revenue in nature and was rightly brought to tax. At the instance of the assessee, the Tribunal has referred for our opinion the following question of law : " Whether, on the facts and in the circumstances of the case, the sum of Rs. 20,000 received by the assessee under clause (3) of the dissolution deed represented an income receipt liable to tax ? " The Tribunal analysed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied having regard to the facts and circumstances of each case. That which is a capital asset in the hands of the assessee will not be so in the hands of another. We have, therefore, to look at the question not on broad generalities as urged by Shri Agarwal, but by looking at the substance of the transaction entered into by the assessee. Looking at the matter in this way, we agree with the contention of Shri Kanwal Krishan that the contract entered into by the assessee on January 28, 1965, was a contract entered into by him in the ordinary course of money-lending business. That contract itself envisaged its cancellation at any time and the compensation received on such cancellation of an ordinary trading contract, it is settled, is a reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it was a device under which the assessee only carried out financing Ramesh Chand, and that the termination of the partnership was, in substance, the termination of an ordinary trading contract of financing another. Since financing was the normal business of the assessee, the amount of Rs. 20,000 constituted a revenue receipt. In our opinion, the Tribunal had examined all the relevant materials and aspects and had drawn proper inferences. The case was clearly governed by the decision of the Supreme Court in CIT v. Gangadhar Baijnath [1972] 86 ITR 19. Learned counsel for the assessee invited our attention to a case in Addl. CIT v. Smt. Mahinderpal Bhasin [1979] 117 ITR 26 (All). In that case Gangadhar Baijnath's case [1972] 86 ITR 19 (SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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