Income-tax---

----Income from other sources or business income---Meanings of "business", "trade" ---Commission received on real estate transaction---Is business income--Indian Income Tax Act, 1961, S.2(13).

On the question whether the commission received by the assessee- company on a real estate transaction was income from other sources or business income:

Held, that trade means a business which a person has learnt or carries on for procuring subsistence or profit; occupation or employment. The commission received in the real estate transaction was, therefore, income arising out of business.

G.K. Joshi and U. Bhuyan for the Commissioner.

Mrs. M. Hazarika for the Assessee.

JUDGMENT

D.N. BARUAH, J. ---At the instance of the Revenue, the following question has been referred by the Income-tax Appellate Tribunal under section 256(1) of the Income Tax Act, 1961 (for short, "the Act"), for the opinion of this Court:

"Whether, on the facts and in the circumstances of the case, the Tribunal is correct in fact and in law in holding that the assessee's income from commission amounting to Rs.15,00,000 is assessable under the head 'income from business'?"

The facts of the case are that during the previous year relevant to the assessment year 1984-85, the assessee received commission of Rs.15,00,000 from Aditya Construction and Development Ltd. on a real estate transaction. The assessee claimed such commission as income from business. The Assessing Officer did not accept the same and treated the commission as income from other sources.

Being aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) allowed the appeal holding that the aforesaid income was income from the business of real estate transaction. The Revenue, therefore, took up the matter before the Income-tax Appellate Tribunal. The Tribunal upheld the decision of the Commissioner of Income-tax (Appeals). Hence, the present reference.

We have heard Shri G.K. Joshi, learned senior standing counsel, assisted by Shri U. Bhuyan, standing counsel for the Department, and Mrs. M. Hazarika, learned counsel appearing on behalf of the assessee.

According to Shri Joshi, the real estate transaction is not a business because a real estate transaction is not a trade or business of the assessee, therefore, the income derived from the commission ought to have been assessed as income from other sources and the Assessing Officer, therefore, rightly assessed the same as income from other sources.

On the other hand, Mrs. Hazarika, learned counsel appearing on behalf of the assessee, disputes the contention of learned counsel for the Revenue. Mrs. Hazarika, learned counsel for the assessee, had drawn our attention to the definition of "business" under section 2, clause (13), of the Act. Pointing to the definition, Mrs. Hazarika submits that as per definition the income derived from the commission should be treated as income from the business as not from the other sources.

We have looked into the definition of "business" under section 2, clause (13), of the Act and the term "business' has been defined which we quote below:

"'business' includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture."

The definition of "trade" does not find its place in the Act. The dictionary meaning of trade as per dictionary of Webster's New Twentieth Century Dictionary, (Second edition). means amongst others. "A means of earning one's living, occupation or work". In Black's Law Dictionary also "trade" means a business which a person has learnt or he carries on for procuring subsistence or profit: occupation or employment. etc, From the dictionary meaning, it is abundantly clear that the commission received in real estate transaction can definitely be said to be business income arising out of business. Therefore, we are of the opinion that the Tribunal has rightly held that the commission received by the assessee in connection with the real estate transaction is assessable under the head "Income from the business".

In view of the above, we answer the question in the affirmative, in favour of the assessee and against the Revenue.

M.B.A./1424/FC Reference answered.