| Case ID |
0f5e5f11-9c1e-4d9b-af83-7639b9bdf308 |
| Body |
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| Case Number |
CIVIL APPEAL No. 1230 OF 1967 |
| Decision Date |
Feb 12, 1969 |
| Hearing Date |
|
| Decision |
The Supreme Court held that the transactions carried out by the assessee constituted an adventure in the nature of trade. The court reasoned that the intention to re-sell the estate at a profit was evident from the agreement and the actions taken by the assessee to divide the estate into multiple plots for sale. The income-tax authorities were justified in treating the land as stock-in-trade and estimating the profit based on normal accounting practices. The appeal was dismissed, affirming the decisions made by the lower courts. |
| Summary |
In the landmark case of P. M. Mohammed Meerakhan v. Commissioner of Income tax, the Supreme Court of India addressed the issue of whether the transactions carried out by the assessee constituted an adventure in the nature of trade under the Income-tax Act, 1961. The case revolved around the assessment year 1956-57, where the appellant was initially assessed on a total income of Rs. 8,400. However, the Income-tax Officer later discovered that the income from the sale of estates had escaped assessment. The court examined the nature of the transactions, emphasizing the importance of intention and organization in determining whether a transaction is a trading adventure. The Supreme Court upheld the findings of the lower courts, concluding that the actions taken by the assessee indicated a profit-making scheme, thus reinforcing the principles of business income taxation. This case is significant for tax law practitioners and highlights the critical aspects of assessing trading ventures in the context of income tax. |
| Court |
Supreme Court of India
|
| Entities Involved |
Not available
|
| Judges |
J. C. SHAH,
V. RAMASWAMI,
A. N. GROVER
|
| Lawyers |
S.T. Desai,
Ms. Bhuvnesh Kumari,
J.B. Dadachanji,
O.C. Mathur,
Sukumar Mitra,
R.N. Schthey,
B.D. Sharma
|
| Petitioners |
P. M. Mohammed Meerakhan
|
| Respondents |
Commissioner of Income tax
|
| Citations |
1969 SLD 444 = (1969) 73 ITR 735
|
| Other Citations |
Californian Copper Syndicate v. Harris [1904] 5 TC 165,
CIR v. Fraser [1942] 24 TC 498,
Leeming v. Jones [1930] 15 TC 333 (HL),
Martin v. Lowry [1926] 11 TC 297 (HL),
Raja J. Rameshwar Rao v. CIT [1961] 42 ITR 179 (SC),
Rutledge v. CIR [1929] 14 TC 490,
Saroj Kumar Mazumdar v. CIT [1959] 37 ITR 242 (SC),
G. Venkataswami Naidu and Co. v. CIT [1959] 35 ITR 594 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
28(i),
34(1)(a)
|