Judgment :- S. SANKARASUBBAN, J. This reference has been made by the Tribunal, Cochin Bench, at the instance of the Revenue. The following questions of law have been preferred. They are as follows : 1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding that the purchase and sale of units in substantial sums can be viewed only as part of the business activity rather than investment activity and is not the finding wrong, unreasonable in law and against the legislative intention expressed in s. 56(2) of the IT Act ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding that the expenditure was incurred only to preserve and protect the assessee's title to the units purchased by it and as such it is to be allowed under s. 37(1) of the IT Act ? 3. Whether, on the facts and in the circumstances of the case, the assessee is entitled to deduction of the expenditure on stamp paper for the purpose of registering the name of the purchaser with the Unit Trust of India under s. 57(iii) of the IT Act ? The assessee is a company mainly engaged in the business of manufacture and sale of asbestos cement sheets and accessories. The assessment year in question is 1991-92. For that assessment year the assessee filed a return showing a total income of Rs. 24, 90, 760. In the return, the assessee showed Rs. 11, 70, 000 as income under the head "other sources". This represented the dividend from the Unit Trust of India. The assessee had acquired 10, 50, 000 units of Unit Trust of India during the years 1989-90 and 1990-91. These units were acquired from persons other than Unit Trust of India. The assessee incurred an expenditure of Rs. 77, 463 towards the purchase of stamp paper for the purpose of registering the units in its name with Unit Trust of India as otherwise it would not have been possible to receive the dividend directly from Unit Trust of India. According to the assessee, the income by way of dividends from the units was a business income, even though it was shown under the head 'other sources'. According to the assessee, the income by way of dividends from the units was a business income, even though it was shown under the head 'other sources'. The assessment was initially completed under s. 143(1)(a) and subsequently a regular assessment was made under s. 143(3). It was urged that the dividend income was assessable as profits and gains of business and not under the head "other sources". It was further contended that the expenditure on the purchase of the stamp paper was a legitimate deduction in computing the income from the units. The alternative contention was that even if the dividend from the units was held to be assessable under the head 'other sources', the assessee was entitled to get deduction of Rs. 77, 463 under s. 57(iii) as expenditure incurred to facilitate the receipt of dividends in its favour. The AO was of the view that the dividend income from the units was assessable under the head 'other sources' and the sum of Rs. 77, 463 being expenditure incurred in the capital field could not be allowed as a deduction under s. 57(iii) of the Act. The assessee has filed appeals before the CIT(A). That appeal was dismissed. The assessee took up the matter in further appeal before the Tribunal and the Tribunal held that the dividend income could not be segregated and considered as income from other sources. The Tribunal further held that the amount of Rs. 77, 463 was an eligible deduction and directed the AO to compute the unit dividend as income under the head 'profits and gains of business' after allowing deduction for the cost of stamp paper. At the instance of the Revenue, as already stated, three questions have been referred to this Court under s. 256(1) of the IT Act.We heard learned senior counsel for the Revenue Sri P. K. R. Menon as well as learned counsel for the assessee Sri S. Sarangan. Sri P. K. R. Menon contended that the business of the assessee was manufacture and sale of asbestos cement sheets and the purchase of units of Unit Trust of India cannot be included in that business. So far as the expenditure involved, namely, stamp papers purchased, is concerned, it was submitted that the purchase of stamp paper was involved for the purpose of registering the units and hence it was capital expenditure. So far as the expenditure involved, namely, stamp papers purchased, is concerned, it was submitted that the purchase of stamp paper was involved for the purpose of registering the units and hence it was capital expenditure. Learned counsel for the assessee submitted that on the facts of this case, the income from the dividend can be treated to be income from profession and business. He further contended that the stamp papers were required for registering the units, as otherwise the dividend will not be directly given by the Unit Trust of India to the assessee. From the facts of this case, it is found that the assessee is a company engaged in the business of manufacture and sale of asbestos. Funds came from the existing business and the assessee was having one P&L a/c and balance sheet and one common fund. The Tribunal found that this was adventure in the nature of trade as was held in G. Venkataswami Naidu & Co. vs. CIT 1959 35 ITR 594 (SC) : TC 12R.297. In this decision the Supreme Court held that : "If a person invests money in land intending to hold it, enjoys its income for some time, and then sells it at a profit, it would be a clear case of capital accretion and not profit derived from an adventure in the nature of trade. Cases of realisation of investments consisting of purchase and resale, though profitable are clearly outside the domain of adventures in the nature of trade. In deciding the character of such transactions several factors are relevant, such as e.g. whether the purchaser was a trader and the purchase of the commodity and its resale were allied to his usual trade or business or incidental to it; the nature and quantity of the commodity purchased and resold; any act subsequent to the purchase to improve the quality of the commodity purchased and thereby make it more readily resaleable; any act prior to the purchase showing a design or purpose; the incidents associated with the purchase and resale; the similarity of the transaction to operations usually associated with trade or business; the repetition of the transaction, the element of pride of possession. A person may purchase a piece of art, hold it for some time and if a profitable offer is received sell it. A person may purchase a piece of art, hold it for some time and if a profitable offer is received sell it. During the time that the purchaser had its possession he may be able to claim pride of possession and aesthetic satisfaction; and if such a claim is upheld that would be a factor against the transaction being in the nature of trade. The presence of all these relevant factors may help the Court to draw an inference that a transaction is in the nature of trade; but it is not a matter of merely counting the number of facts and circumstances pro and con; what is important to consider is their distinctive character. In each case, it is the total effect of all relevant factors and circumstances that determines the character of the transaction.In cases where the purchase has been made solely and exclusively with the intention to resell at a profit and the purchaser has no intention of holding the property for himself or otherwise enjoying or using it, the presence of such an intention is a relevant factor and unless it is offset by the presence of other factors it would raise a strong presumption that the transaction is an adventure in the nature of trade." Therefore, in the context of the above decision analysed, we agree with the Tribunal that the dividend obtained by the Unit Trust can be treated as income from profession or business. The next contention with regard to the purchase of stamp papers for Rs. 77, 463. According to the assessee, this amount was spent for the purpose of registration of the units with the Unit Trust of India. The assessee purchased the units from a third person. According to the assessee, if it is not registered with the Unit Trust of India, the assessee will not get the dividend directly from the Unit Trust of India. On the other hand, learned counsel for the Revenue submitted that this amount was spent for making the transaction complete and hence it is a capital expenditure. In the book "Agents Manual" (cl. On the other hand, learned counsel for the Revenue submitted that this amount was spent for making the transaction complete and hence it is a capital expenditure. In the book "Agents Manual" (cl. 5.11)" dealing with transfer it is stated as follows : "The unit holder desirous of transferring his units wholly or in part (in multiples of hundred) to another person/s has to execute the prescribed transfer form (Annexure 7) with the transferee/s and forward it to Unit Trust of India for registration along with the relative unit certificate/s." From this it can be seen that the registration has to be made in order to see that the transfer is completed. It is not merely for the purpose of getting the dividend that the registration is necessary. If the assessee has to become the holder of the units, the transfer has to be registered with the Unit Trust of India. If that be so, the amount spent for the purpose of registration is spent in connection with the acquisition of the unit. Hence, it can be said to be only a capital expenditure.In the above view of the matter, the questions referred are answered as follows : Question No. 1 is answered in favour of the assessee and against the Revenue. Question Nos. 2 and 3 are answered in favour of the Revenue and against the assessee.