Legal Case Summary

Case Details
Case ID 735cc7c7-1e08-49cc-912c-4a3b182972e4
Body View case body.
Case Number CIVIL APPEAL Nos. 581 TO 584 OF 1966
Decision Date Nov 22, 1967
Hearing Date Apr 17, 1967
Decision The Supreme Court upheld the findings of the Tribunal and the High Court, concluding that the income derived by the assessee from the sale of its shares and securities was a revenue receipt and, therefore, taxable under the Income-tax Act. The Court found that the shares were purchased and sold with the motive of earning a profit, rather than as a legitimate investment. It highlighted that the circumstances indicated an adventure in the nature of trade, given that the shares were bought during a falling market and sold at a profit. The appeals were dismissed, confirming the lower courts' decisions against the assessee.
Summary In the landmark case of Dalhousie Investment Trust Co. Ltd. v. Commissioner of Income Tax, the Supreme Court of India addressed crucial issues regarding the taxation of income derived from the sale of shares. The case revolves around whether the profits from the sale of shares by Dalhousie Investment Trust were taxable as revenue receipts under the Income-tax Act, 1961. The Court examined the nature of the transactions, the intent behind the share purchases, and the circumstances surrounding their sale. The Tribunal and High Court had previously determined that the shares were sold with the primary motive of profit, rather than for investment purposes, which led to the conclusion that the income was taxable. This case emphasizes the importance of intent in determining the nature of financial transactions and has significant implications for investment firms regarding tax liabilities. Keywords such as 'Income Tax', 'Revenue Receipt', 'Taxable Income', and 'Investment Strategy' are essential for understanding the case's impact on tax law and corporate investment practices.
Court Supreme Court of India
Entities Involved Not available
Judges J.C. Shah, V. Ramaswami, V. Bhargava
Lawyers A.K. Sen, Bishan Narain, R.K. Chaudhuri, B.P. Maheshwari, Niren De, T.A. Ramachandran, R.N. Sachthey, S.P. Nayyar
Petitioners Dalhousie Investment Trust Co. Ltd
Respondents Commissioner of INCOME TAX
Citations 1968 SLD 146, (1968) 68 ITR 486
Other Citations Bengal and Assam Investors Ltd. v. CIT [1966] 59 ITR 547 (SC), CIT v. Bai Shirinbai K. Kooka [1962] 46 ITR 86 (SC), Dalhousie Investment Trust Co. Ltd. v. CIT [1967] 66 ITR 473 (SC), CIT v. Ramnarain Sons (P.) Ltd. [1961] 41 ITR 534 (SC)
Laws Involved Income-tax Act, 1961
Sections 4