HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
G. Venkataswami Naidu & Co. v. Commissioner of Income-tax
Civil Appeal No. 709 of 1957
[1959] Supp. 1 SCR 646 ·
Income-tax Act 1922 sections 2(4), 10 and 66(1)
Sources & disclosures includedDownload original judgment / order
3-judge bench · T. L. Venkatarama Aiyar · P. B. Gajendragadkar · A. K. Sarkar
Assessment years: 1948-49
01 · Facts of the case
A mill’s managing-agent firm assembled four adjoining plots during 1941–42 and sold them to the mill in 1947 at a profit. Its asserted investment and employee-housing explanations were rejected on the evidentiary record.
Source: Primary report: SCR 649–652
02 · Discussion by the Hon’ble Court
Whether established facts constitute an adventure in the nature of trade is a mixed question of law and fact, open to reference review for legal error. An isolated transaction can qualify, but all circumstances—not a mechanical count or universal test—must be assessed.
Source: Primary report: SCR 652–664
03 · Judicial decision
The coordinated acquisitions, absence of meaningful use or development, managing-agent influence and sole resale-profit intention supported the trading-adventure finding. The presumption from exclusive resale intention was unrebutted on these facts.
Source: Primary report: SCR 681–683
04 · Outcome / in whose favour
The taxpayer’s appeal was dismissed with costs; the profit remained taxable as business income.
Source: Primary report: SCR 683
05 · AKHB REVIEW POINT
Intention to resell at profit is relevant and can raise a strong presumption when sole and exclusive, but it is not conclusive. Ordinary investment realization must be distinguished, and the decision does not make every profitable land sale business income.
Source & verification
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Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
Source checked 2026-10-23. Subsequent treatment and present-law applicability have not been comprehensively checked.
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