COMMISSIONER OF INCOME-TAX, WEST BENGAL II vs RAJASTHAN MINES LTD., CALCUTTA

The Supreme Court held that the purchase of proprietary rights to collect arrears of rent and royalty does not constitute taxable income under the Indian Income-tax Act, 1922. The Court found that the assessee, having acquired these rights, did not possess the right to collect them as the owner of the property. Furthermore, the Tribunal's conclusion that the transactions were a trading adventure was unsupported by evidence, as the assessee had not engaged in similar transactions before, and the circumstances did not indicate a business motive. The High Court's differing conclusions were dismissed, affirming the Tribunal's findings.