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TMI Blog1991 (5) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... red also in sustaining the disallowance of Rs. 16,409 representing cost of stamps, miscellaneous expenses and proportionate expenses of audit fees, printing and stationery, service charges, etc., connected with the business of share dealing which are connected with such business. The claim of the assessee is also that the CIT(Appeals) should have allowed carried forward of loss of Rs. 3,50,562 arising from the share dealing business and that the expenses relating to proportionate service charges should be allowed in the computation of dividend income. 3. In the assessment order, the Assessing Officer has taken the status of the assessee as Company. He noted that the assessee disclosed the loss under the head 'dividend income' and loss out of share dealing. Hearing was given and the parties placed various papers which were considered by the Assessing Officer. Amongst other things, he noted that the assessee purchased 3178 equity shares of Rs. 100 of Standard Batteries Ltd. for Rs. 12,12,740 and sold away 2000 equity shares at Rs. 6,00,000 and the rest of the shares i.e. 1178 were held by the assessee which claimed to have incurred a loss of Rs. 3,50,562. The assessee claimed the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of shares as on 31-12-1983 on the basis of which, the value of the closing stock of the share was taken by the assessee. The Assessing Officer scrutinized the details of shares purchased and he observed that the assessee purchased shares on the above dates at Rs. 380 per share and, therefore, the market value per share was at Rs. 380 as on 15-11-1983. The assessee's accounting year ended on 31-12-1983. He, therefore, held that the assessee has failed to substantiate how the value of the share was reduced from Rs. 380 per share to Rs. 300 per share and later on to Rs. 295 per share. He found that no evidence was furnished regarding the sale of shares at Rs. 300 per share as well as the market quotations of the share at the time of sale. He, therefore, declined to accept the loss as claimed. The income was, therefore, taken as income from other sources from the dividend income and Nil from the speculation business. 7. The assessee took up the matter before the learned CIT(Appeals) and claimed, amongst other things, deduction of interest on loan from the dividend income. The assessee also agitated before the CIT(Appeals) that the Assessing Officer went wrong in holding that the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion appears to be without any basis as from the order of the CIT(Appeals), this point could not be said to have been taken by the assessee in the grounds of appeal before the CIT(Appeals) or at the time of hearing. In fact, the CIT(Appeals) has categorically mentioned this aspect of the matter as briefly mentioned by us earlier. At any rate, under the rules neither parties could place fresh materials before the Appellate Tribunal at this stage. Of course, the Appellate Tribunal may on his own accord call for certain material or evidence if it deem fit which is not the situation in the present case. That apart, there is no application for admission of such fresh evidence. In the circumstances, this fresh piece of materials cannot be taken into account. 11. The Assessing Officer was of the view that the loss arising out of its purchase and sale of shares should be deemed to be a loss from the speculation business. But there was no further discussion in the order nor any material was placed to indicate on what basis or facts such conclusion was drawn by the Assessing Officer. Of course, the assessee has held shares in other companies from which dividend income was derived and duly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re lacking in the present case although the Assessing Officer held that any shares held by the assessee should be deemed as a speculative business, whereas the assessee's claim was that he was dealing in shares and, in fact, held them as stock-in-trade as appearing in the balance-sheet as well as in other copies of accounts placed in the paper book. In the case of CIT v. Ganesh Das Ram Swaroop Kakani [1990] 181 ITR 93, the Hon'ble Rajasthan High Court has dealt with similar situation in which a business loss or loss in speculative transaction was considered. 15. In this connection, it will be helpful to refer to a decision of the Hon'ble Supreme Court of India in the case of Nirmal Trading Co. v. CIT [1980] 121 ITR 54, in which case the assessee, a dealer in paper, hessian, etc., entered into several transactions of sale and purchase with different parties which were settled by handing over delivery orders and payment by cheque. It was found in the said case that there was no evidence that actual delivery of the goods was ever effected to the assessee or to the subsequent purchaser from the assessee. The transaction in that particular case was held by the Hon'ble Court as " specul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te. Such finding and such bringing on record all basic facts would help the authorities to come to a proper conclusion as this issue is likely to crop up in other assessment years also. In the circumstances, we deem it fit that the matter should be dealt with by the Assessing Officer afresh after giving the assessee an opportunity of being heard, so that the assessee's claim that the purchase and sale of shares of Standard Batteries was his regular business in share dealing and not a speculative business. In fact, other surrounding circumstances would have to be ascertained regarding the valuation of shares at the relevant point of time as would be needed as the assessee could not place basis for its valuation of stock at the rate of Rs. 295 per share although similar shares were sold in a short time at the rate of Rs. 300 per share, whereas the cost was at Rs. 380. At the same time, as held by the various courts in many decided cases, few of which have been discussed by us above, various facts are to be brought on record and that too after examining the transaction and the parties involved, so that a proper conclusion of fact can be made. 17. Thereafter, it would be necessary for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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