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Arbico Limited, a corporate body, was a building contractor and the objects of its memorandum included the power to deal in property. The company acquired four building plots and built residential accommodation on one of them. The building was sold to the Federal Government of Nigeria at a profit, which was appropriated to the tax payer’s working capital. The sale was the first of property by the tax payer. The tax authority assessed the tax payer on the basis of the profit made on the property, contending that the profit was in respect of the trade or business of the tax payer. The tax authority further contended that as the tax payer’s memorandum of association included the power to deal in property, it could be assumed that the sale was in furtherance of its trading objectives. The tax payer contended that the transaction was not a trade but a realisation of capital and that the sale, being an isolated transaction, was not trading in the sense outlined by the Companies Income Tax Act.