JUDGMENT (Per Srikrishna, J.) This reference made under section 256(1) of the Income-tax Act, 1961, refers for the opinion of this Court the following questions of law arising out of the Tribunal's Order dated 6th September 1973 in ITA No. 2250/B/74-75 pertaining to Assessment Year 1971-72 : (1) "Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding "that the surplus of Rs. 1,60,482/- realised by the assessee did not constitute profits from business ? (2) "Whether on the facts and in the circumstances of the case, the Tribunal was justified in not deciding the issue regarding the levy of interest u/s. 215 of the Act ?" The assessee had a controlling interest in a company called the India Sugar and Refineries Ltd. Another company by name Salar Jung Sugar Mills Ltd. was a subsidiary company of this company. In or about 1968, Salar Jung Sugar Mills Ltd. acquired 47% shares in a company named Tungbhadra Pulp & Board Mills Ltd. A partnership firm, M/s. Straw Board Dealers, which was the sole selling agent of Tungbhadra Pulp & Board Mills Ltd., was entitled to a sum of Rs. 31,39,061/- from Tungbhadra Pulp & Board Mills Ltd. This amount was shown as debt due to M/s. Straw Board Dealers in the accounts of the Tungbhadra Pulp & Board Mills Ltd. as on 31st March 1967 towards loan and commission accrued. The financial affairs of Tungbhadra Pulp & Board Mills Ltd. were in bad shape and, unless it was able to pay the amount owed by it to M/s. Straw Board Dealers, there was imminent danger of its being put into liquidation at the instance of M/s. Straw Board Dealers in order to enforce their claim. When matter stood thus, in order to rejuvenate the Tungbhadra Pulp & Board Mills Ltd., M/s. Salar Jung Sugar Mills Ltd. acquired 47% of its shares. The assessee, and his brother Ratanlal R. Morarka, also simultaneously purchased the claim of Rs. 31,39,661/- of M/s. Straw Board Dealers against the Tungbhadra Pulp & Board Mills Ltd. for an amount of Rs. 4,03,568/-. They also incurred incidental expenses in connection with the purchase amounting to Rs. 12,629/-. Thus, the aggregate expenditure incurred by the assessee and his brother together for purchasing the claim amounted to Rs. 4,16,189/-. 31,39,661/- of M/s. Straw Board Dealers against the Tungbhadra Pulp & Board Mills Ltd. for an amount of Rs. 4,03,568/-. They also incurred incidental expenses in connection with the purchase amounting to Rs. 12,629/-. Thus, the aggregate expenditure incurred by the assessee and his brother together for purchasing the claim amounted to Rs. 4,16,189/-. The assessee and his brother had put the money for this acquisition of claim in the ratio of 3:1. On 26th September 1968, the assessee and his brother settled their claims with Tungbhadra Pulp & Board Mills Ltd. for an aggregate amount of Rs. 7,50,000/-, out of which the assessee's share (in the ratio of 3:1) was Rs. 5,62,000/-. The assessee realised a sum of Rs. 4,72,626/- out of his share during the accounting year relating to the assessment year 1971-72. Since the assessee had paid only a sum of Rs. 3,12,142/- for purchasing the above claim, the surplus realised out of the transaction was Rs. 1,60,432/-. The Income-tax Officer, during the assessment proceedings, treated the said amount of Rs. 1,60,482/- in the hands of the assessee as business profits to be taxed as such. He also charged interest under section 215 of the Income-tax Act, 1961. In the appeal filed by the assessee, the Appellate Assistant Commissioner took the view that the amount, added by the Income-tax Officer as business income was merely income of a casual and non-recurring nature, not taxable under section 10(3) of the Act. He, accordingly, directed the deletion of the said amount in computing the total income of the assessee. Consequent upon this finding, the Appellate Assistant Commissioner directed the Income-tax Officer to give credit to the assessee in respect of taxes deducted at source and not to levy interest under section 215 in case the income got reduced to nil on giving effect to the appellate order or, if the interest under section 215 was found chargeable, to make levy only upto the date of the filing of the return. On appeal by the Department, the Tribunal followed the view taken by it in the case of the assessee's brother for the assessment year 1971-72 in ITA No. 3750/B/73-74 and held that the normal trade of the assessee and his brother was not purchasing of claim and that they had purchased this particular claim only with a view to see that M/s. Straw Board Dealers did not enforce their huge claim against Tungbhadra Pulp & Board Mills Ltd., in which case the latter would have been strangulated. The Tribunal, in that case, was of the view" that the circumstances of the case clearly indicated that the assessee and his brother entered into the transaction of purchasing the claim of M/s. Straw Board Dealers only with a view to save Tungbhadra Pulp & Board Mills Ltd. and not with any idea of scheme to earn profits. In that case, the Tribunal had also taken the view that the additional amount received over what was invested for the purchase of the claim from M/s. Straw Board Dealers was only a casual, non-recurring receipt and not out of an adventure in the nature of trade. In the assessee's case also, the Tribunal found the circumstances of the case to be identical and held that the Appellate Assistant Commissioner was correct in accepting the assessee's claim that the amount in dispute was only income of a casual and non-recurring nature. The Tribunal has, at the instance of the Revenue, referred the two questions, as stated hereinbefore. According to the learned counsel for the Department, the circumstances clearly indicated a scheme to earn profits. He submits that the assessee was a money-lender and was looking out for an opportunity to earn profits elsewhere. The assessee and his brother, who had controlling interests in the principal company (i.e., India Sugar & Refineries Ltd.), were very much aware that the subsidiary company (viz., the Salar Jung Sugar Mills Ltd.) had acquired 47% shares in Tungbhadra Pulp & Board Mills Ltd., with a view to rejuvenate the said company and that, in course of time, Tungbhadra Pulp & Board Mills Ltd. would turn the corner and earn profits. With this foreknowledge, the assessee acquired the claim of M/s. Straw Board Dealers of Rs. 31,39,661/- for the partly amount of Rs. With this foreknowledge, the assessee acquired the claim of M/s. Straw Board Dealers of Rs. 31,39,661/- for the partly amount of Rs. 4,03,565/- so that, at the opportune moment, this claim could be settled for a higher amount so as to realise a profit on the transaction. That a profit would be made was foreseen by the assessee because of his intimate connection with the principal company, viz., India Sugar & Refineries Ltd. He strongly contended that this was an adventure in the nature of trade as the assessee, being a shrewd businessman, had made an elaborate scheme to earn a substantial profit to himself. The fact that Tungbhadra Pulp & Board Mills Ltd. was in bad financial position and the fact that the assessee's brother was a director in the said company would enable the assessee and his brother to buy the claim against the said company at a song and thereafter to settle the said claim at a higher price, realising a substantial profit in the bargain. Not only was this foreseen, but it was also engineered, according to the learned counsel for the Revenue. He relied upon the judgment of this Court in CIT v. Himalaya Tiles & Marble Pvt. Ltd. (100 ITR 177) and P. S. Ghanekar v. CIT (50 ITR 236) to support his submissions. In Ghanekar's case (supra), one D had earned a commission of Rs. 3,25,000/- for services rendered to F & Co. There were difference between D and F & Co. F & Co. expressed its willingness to pay to D. Rs. 2,25,000/- to avoid litigation. The assessee, who was a chartered accountant and known to both parties, was approached bringing about a settlement. The assessee, who knew that F & Co. was prepared to pay D Rs. 2,25,000/-, took an assignment of D's claim for a sum of Rs. 1,25,000/- and transferred his right to the company for Rs. 2,10,000 making a profit of Rs. 85,000/- "in the transaction. This Court rejected the contention of the assessee that the finance was of a casual and non-recurring nature and not liable to be taxed. The fact that the assessee, before he embarked upon the negotiations with D, had prior knowledge of the Company's decision to pay upto Rs. 2,10,000 making a profit of Rs. 85,000/- "in the transaction. This Court rejected the contention of the assessee that the finance was of a casual and non-recurring nature and not liable to be taxed. The fact that the assessee, before he embarked upon the negotiations with D, had prior knowledge of the Company's decision to pay upto Rs. 2,25,000/- and utilised this prior knowledge to take up the assignment in his own favour was held by this Court indicative that it was a venture in the nature of trade upon which the assessee embarked. Said the Court : ".... By taxing the assignment in his own favour the assessee embarked on a venture, a venture on his own account. In view of his previous knowledge, he was, as it were, to use the racing language, betting on a certainty. ..." It was also found that the assessee did not possess the means to make the payment of Rs. 1,25,000/- to D and, if the company had not satisfactorily settled his claim, he might have had to resort to litigation. In these circumstances, this Court took the view that the assessee must be considered to have acquired the claim just as a trader acquires an asset or stock-in-trade with the expectation of making profit, but at the time not ruling out a possibility of making a loss. This case does not assist the Department, inasmuch as, in the present case, the Tribunal has found that the assessee's motive for acquiring the claim of M/s. Straw Board Dealers has to avoid embarrassment to Tungbhadra Pulp & Board Mills Ltd. and to avoid strangulation of the said company. In the Himalayan Tiles & Marble's case (supra), the assessee, a private limited company, took over the businesses of going concerns in 1956. The outstandings and liabilities of the concerns were not transferred to the company. In 1957, two claims of the concerns were purchased by the company for an aggregate amount of Rs. 57,716/-. In the accounting year 1958-59, there was an award, under which the assessee received a sum of money. The surplus realised over costs, amounting to Rs. 60,940/-, was brought to tax as income from business by the Income-tax Officer. In 1957, two claims of the concerns were purchased by the company for an aggregate amount of Rs. 57,716/-. In the accounting year 1958-59, there was an award, under which the assessee received a sum of money. The surplus realised over costs, amounting to Rs. 60,940/-, was brought to tax as income from business by the Income-tax Officer. This Court took the view that, as, at the time of purchasing the actionable claim, the assessee was under no obligation or compulsion to do so and as there was close promimity between the purchasing of the claim and realisation, the circumstances showed that the assessee had embarked upon a venture in the nature of trade and that the surplus realised from the venture was liable to be included in his income under section 10 of the Act. This decision was reached by this Court despite the fact that the memorandum of Association of the assessee company therein did not permit the assessee - company to trade in actionable claims. We think that the circumstances indicated by the Court were too glaring and ruled out any other motive on the part of the assessee in purchasing the actionable claim, except to embark on a venture in the nature of trade. The learned counsel for the assessee, contended, firstly, that a receipt in the hands of the assessee could not straightaway be taxed as income and the burden of showing that the receipt was of the nature of income was upon the Revenue and in this case the Revenue had failed to discharge this onus. He relied upon the decision of the Supreme Court in Parimisetti Seetharamamma v. CIT, Andhra Pradesh (57 ITR 532) in support. In that case, the Supreme Court laid down that, in all cases in which a receipt is sought to be taxed as income, the burden lies upon the Department to prove that it is within the taxing provision. Where, however, a receipt is of the nature of income, the burden of proving that it is not taxable, because it falls within an exemption provided by the Act, lies upon the assessee. Applying this test to the facts of the present case, we are of the view that the Department has failed to discharge the burden placed upon them. The receipt of the money was not disputed. Applying this test to the facts of the present case, we are of the view that the Department has failed to discharge the burden placed upon them. The receipt of the money was not disputed. The assessee contended that this receipt was not the result of his embarking upon a venture in the nature of trade. He explained his motive in purchasing the actionable claim as only to avoid Tungbhadra Pulp & Board Mills Ltd. being brought to liquidation by M/s. Straw Board Dealers to enforce their huge claim. That the assessee was interested in Tungbhadra Pulp and Board Mills Ltd. not being embarrassed is obvious because of its intimate connection with the principal company, viz., Indian Sugar and Refineries Ltd. When the assessee set up this motive as the only motive for acquiring the claim, the burden squarely lay upon the Department to rebut it by cogent evidence which it has failed to do. The learned counsel for the assessee relied up on and drew support from the judgment of the Supreme Court in C. Venkataswami Naidu & Co. v. CIT (35 ITR 594). The Supreme Court in this case has laid down a number of indicin which would stamp even a solitary dive in the ocean of trade as a venture in the nature of trade. We are afraid, none of this can be said to be satisfied in the present case. Finally, the learned counsel for the assessee brought to our notice another judgment of our High Court in CIT v. Radheshyam R. Morarka (127 ITR 111), which seems to be an all fours with the assessee's case. In this case also, an actionable claim was purchased by the assessee and the Revenue showed that the said transaction had been entered into with the possibility of asking profit. The Court, however, took the view that this, per se, would not establish that the transaction was an adventure in the nature of trade. The Court distinguished the judgment in Himalayan Tiles' case (supra) and took the view that the facts showed that the assessee was closely connected with the will against which there were decree, and that it would be reasonable to say that the possible motive of the assessee in purchasing the decree against the said mill was to avert the pressure which might be exerted against the mill. Desai, J., observed : The question which we have to consider is whether it has been made out that the dominant intention of the assessee was to embark on a venture in the nature of trade when he purchased the two decrees. If the reasonable possibility of the assessee having a motive of assisting the judgment-debtors under the decrease cannot be ruled out, this conclusion cannot be arrived at and it cannot be held that the dominant intention of the assessee has been sufficiently or satisfactorily established. It is true that the assessee had made a profit and realised a surplus. It is true also that this had been done within a fairly short period of nine to ten months. But the mere earning of the surplus or realisation of profits is not equivalent to embarking upon an adventure in the nature or trade. .... It is not sufficient for the revenue to succeed by merely showing that the transaction was entered into having the possibility of making a profit in mind. In addition to this aspect of the matter, it must bear an indicin or trade. For such purpose the motive, the purpose of the transaction, must be decisively held to be not of the nature suggested by the Tribunal; and unless we are in a position to do so, which we are not, we must hold that the Tribunal was not in error in arriving "at the conclusion it did." In our view, the observations in this case are opposite to the facts of the present case. In fact, the assessee's case here is on a stronger footing. Firstly, the profit was not realised within a short time as in the above case; it was realised after about 20 months. Secondly, the department has hardly laid any material on record to rebut the declared motive of the assessee for purchasing the actionable claim. We must, therefore, accent the assessee's motive for purchasing the claim against Tungbhadra Pulp and Board Mills Ltd. as what he says it was, viz., to avoid embarrassment to the said company at the instance of M/s. Straw Board Dealers. Nothing has been placed on record to detract from this suggested motive on the part of the assessee. We must, therefore, accent the assessee's motive for purchasing the claim against Tungbhadra Pulp and Board Mills Ltd. as what he says it was, viz., to avoid embarrassment to the said company at the instance of M/s. Straw Board Dealers. Nothing has been placed on record to detract from this suggested motive on the part of the assessee. As the Supreme Court said in Parimisetti's case (supra) and as our Court observed in Morarka's case (supra), the Department has failed to discharge the burden of showing that the receipt was in the nature of income. In this result, we answer the first question in the affirmative and in favour of the assessee, The second question does not require an answer, as it is seen that, if the amount of Rs. 1,60,482/- is deleted in assessing the total income of the assessee, there would be a nil return. The questions are answered accordingly. There will be no order as to costs.