LexG. VEKKATASWAMI NAIDU & CO. versus THE COMMISSIONER OF INCOME-TAX
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Dnu 0nyal v. The Stnt~ of Uttar Pnidesh Venkatarama Aiyor j. 646 SUPREME COURT REPORTS [1959] Supp. the question which we have got to decide here, and on the language of s. 15 of the Act, which is what we are concerned with in this appeal, all that is required is that. a private prosecutor should prefer his com- plaint within one year of the discovery of the offence, and if that is done, the bar under that section cannot apply. We agree with the decision of the learned Judges of the Court below that the proceedings are not barred by s. 15 of the Act. This appeal is accordingly dismissed. Appeal dismissed. G. VEKKATASWAMI NAIDU. & CO. v. THE COMMISSIONER OJ!' INCOME-TAX (T. L. VENKATARAMA AIYAR, P. B. GAJENDRAGADKAR and A. IC SARKAR, JJ.) luco111e 1"ax-l nconie froui isolated fransactt'ons--" Adventure in the nature of trade~ "-Business incon:e· -Indian. l11co1n,~ 1'ax Act. 1922 (XI of r922), SS. 2(4), IO. Reference to High Court-Transaction, whether ur not an advcn~ lure in the nature of trade-Mixed question of law and fact-lndia11 Income-tax Act, r922 (XI of 1922), s. 66(1). The appellant, who was a firm acting as managing agents of a limited company (the Mills), purchased four plots of land adjoining the Mills on various dates between 1941 and 1942, and about five years later sold them to the Mills, as a result of which the appellant realised a sum of Rs. 43,887 in excess of the pur- chase price. For the assessment year r948-49 the Income.tu Officer treated the amount as the income of the appellant and assessed it to income-iax under head 'business', on the grounrl that there was no evidence to show that the appellant had pur- chased the said lands for agricultural purposes or that they were acquired as an in\·estrnent. and that since the lands \Vere adjacent to the Mills the appellant must have purchased them solely with a view to sell them to the Mills with profit. He considered that the transaction had all the elements of a business transaction and was· thus an adventure in the nature of trade withins. 2(4) of the Indian Income-tax Act, 1922. The Appellate Tribunal rejected the explanation given by the appellant regarding the object with which it had purchased the plots of land and agreed (t) 8.C.R. SUPREME COUR'l' REPORTS 647 with the vjew taken by the Income-tax Officer. At the instance z95B of the appellant the Tribunal referred to the High Court the <.J.Uestion: "whether there was material for the assessment of G. Venkataswa"" the sum of Rs. 43,887 being the difference between the purchase Naidu cS- Co. and sale price of the four plots of land as income from an v. . . adventure. in the nature of trade." The High Court held that Th• Commsssion1' the transaction in question was an adventure in the nature of 01 lneomi-ta!f trade and so the income-tax authorities were justified in taxing the amount under the head ' business ' for the relevant year. On appeal by special leave to the Supreme Court, it was contend- ed for the appellant that on the facts and circumstances of the case it was erroneous in law to hold that the transaction in question was an adventure in the nature of trade. On the other hand, it was urged for the respondent that the question as raised before the High Court was one of fact not liable to be challenged under s. 66( r) of the Act. Held, (I) that the expression "adventure in the nature of trade " in sub-s. (4) of s. 2 of the Indian Income-tax i\ct, 1922, postulates the existence of certain elements in the adventure which in law would invest it with the character of trade or busi- ness and that a tribunal while considering a question as to whether a transaction is or is not an adventure in the nature of trade, before arriving at its final condusion on facts, has to address itself to the legal requirements associated with the c.oncept of trade or business. Such a question is one of mixed law and fact and the decision of the tribunal thereon is open to consideration under s. 66(1) of the Act. Meenakshi Mills, Madurai v. Commissioner of Income-tax, Madras, [1956) S.C.R. 691 and Oriental Investment Co., Ltd. v. Commissioner of Income-tax, Bombay, [1958) S.C.R. 49, relied on. Edwards v. Bairstow, [1956) A.C. 14, considered and helcl not inconsistent with the abovesaid decisions. (2) that in the circumstances of this case it would be more appropriate to frame the question in this from: "whether, on the facts and
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