HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Raja Bahadur Kamakhya Narain Singh v. Commissioner of Income-tax, Bihar and Orissa
Civil Appeals Nos. 481 and 482 of 1966
[1970] 2 SCR 163 ·
Indian Income-tax Act, 1922: section 4(3)(vii) and sections 66(2), 66(4)
Sources & disclosures includedDownload original judgment / order
2-judge bench; unanimous judgment delivered by J. M. Shelat, J. · J. M. Shelat, J. · C. A. Vaidialingam, J.
Assessment years: 1945-46, 1946-47
01 · Facts of the case
A landholder successively moved inherited Government securities into shares, wartime gold and income-bearing securities. The Tribunal treated large gold gains and gains on Karanpura shares acquired toward management control as trading profits, and the High Court treated that classification as pure fact (SCR pp.163-170; PDF pp.1-8).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
Adventure-in-trade classification is mixed fact and law. Resale intent alone is insufficient; conduct, surrounding circumstances and whether assets became stock-in-trade matter. Bulk conversions, nearly four-year sterile gold holding, failure to sell at the wartime peak, compelled bond purchase and a control-motivated share acquisition showed investment rather than dealing (SCR pp.170-176; PDF pp.8-14).
Source: Primary judgment: discussion
03 · Judicial decision
The Court allowed both appeals, replaced the High Court answers with answers for the assessee and awarded one set of costs (SCR p.176; PDF p.14).
Source: Primary judgment: decision
04 · Outcome / in whose favour
In favour of the assessee: the disputed gains were not taxable trading profits on these facts (SCR pp.175-176; PDF pp.13-14).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: classify investment versus trade holistically and preserve documentary evidence of purpose, holding conduct, funding changes and control objectives. The inquiry is mixed law and fact and remains intensely case-specific (based on SCR pp.171-176; PDF pp.9-14).
Source: Primary judgment: review point
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
The decision applies repealed 1922 Act concepts to highly fact-specific wartime transactions; no current capital-gains or business-income result is represented.
Later treatment
Source checked 2026-10-11. Later judicial treatment and current statutory applicability have not been comprehensively checked; no current-law or citator clearance is represented.
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