TMI Blog1956 (3) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ue on the 29th March, 1948, was only ₹ 715 and not ₹ 1,100 and that the assessee had paid ₹ 1,100 instead of ₹ 715 because it secured the additional advantage of getting the managing agency rights, and therefore the Income-tax Officer allowed the assessee loss on the basis of the difference between ₹ 715 and ₹ 225. The assessee also had made some claim with regard to dividends, which claim was disallowed by the Income-tax Officer. There was an appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner confirmed the Income-tax Officer with regard to the basis of calculating the losses of the assessee during the year of account in respect of these shares, but he gave relief to the assessee on the question of dividends. From this decision of the Appellate Assistant Commissioner there were cross appeals. The assessee appealed against the decision of the Appellate Assistant Commissioner confirming the Income-tax Officer with regard to the computation of the loss in respect of these shares. The Department appealed in respect of the decision of the Appellate Assistant Commissioner with regard to dividends. The Tribunal dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant Commissioner having confirmed that view, the Department did not prefer any appeal against the finding of the Appellate Assistant Commissioner ; in other words, it accepted that finding as correct; and the assessee appealed against the decision of the Appellate Assistant Commissioner claiming that the price should be the higher price of ₹ 1,100. Therefore, the only question that the Tribunal had to decide was whether the Appellate Assistant Commissioner was right in fixing ₹ 715 as the proper price or the assessee was right in claiming ₹ 1,100. It must be borne in mind that the Tribunal has no jurisdiction to enhance the assessment as the Appellate Assistant Commissioner has, and therefore in substance if the view of the Tribunal could in law be acted upon, the decision of the Tribunal amounted to this that the assessment of the assessee should be enhanced and the amount allowed by the Income-tax Officer and the Appellate Assistant Commissioner for loss in the assessment year should be deleted and no deduction whatsoever should be given to the assessee with regard to the loss in the dealing of these shares. It is said by Mr. Joshi that the substantive order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy of the mills. These shares were purchased at a much higher price than the market price prevailing at the material time. The Tribunal, however, did not dispose of the appeal merely on this issue. The question which was agitated before the lower authorities related to the purchase price of the stock-in-trade. The assessee wanted to take the price which he had paid for these shares, i.e., ₹ 1,100 per share. The Income-tax Officer had taken the market price of the shares at the time of the purchase of the shares, i.e., at ₹ 715 per share. In view of the finding given by the Tribunal that the purchase of the shares was not the purchase of stock-in-trade, the question, therefore, arose what was the point of time at which these shares were transferred to the stock-intrade. The Tribunal considered the various transactions in shares done by the assessee and came to the conclusion that the price of the shares when they can be said to have become the stock-in-trade of the business could not be taken at higher than ₹ 524-6-0 per share. As the Department had already allowed a higher price of ₹ 715 per share, the appeal of the assessee was dismissed. 3. We think it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assessee was whether the assessee was entitled to loss on the basis of the difference between ₹ 1,100 and ₹ 225, or ₹ 715 and ₹ 225. The Income-tax Officer and the Appellate Assistant Commissioner held in favour of the Department and the assessee appealed to the Tribunal, his ground of appeal being that he should have been allowed loss on the basis of the difference between ₹ 1,100 and ₹ 225. In this appeal the Tribunal, while dismissing the appeal of the assessee, held (1) that the shares were not stock-in-trade but constituted capital investment, (2) that the price of the shares should be ₹ 524-6-0 as of the 28th August, 1948, when according to the Tribunal these shares were converted into stock-in-trade, (3) that the loss should be calculated on the basis of the difference between ₹ 524-6-0 and ₹ 225, and (4) that this was a clear case of under-assessment. The question is whether the Tribunal had jurisdiction to arrive at these findings. Now, the jurisdiction of the Tribunal is to be found in section 33(4) which is in very wide terms: The Appellate Tribunal may, after giving both parties to the appeal an oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was competent to the Tribunal to do, but the Tribunal gave a finding that the price was ₹ 524-6-0 and it was a clear case of under-assessment, which neither arose out of any ground of appeal and was clearly adverse to the assessee. We wish to make this perfectly clear, as has been pointed out by Mr. Justice Kania, that it was open to the Tribunal to have upheld the decision of the Appellate Assistant Commissioner not only on the ground on which the judgment of the Appellate Assistant Commissioner was based but on any other ground. In this very case it was open to the Tribunal to say that it took the view that the shares were capital investment and not stock-in-trade. All that it could have done was to have used this argument to support the finding of the Appellate Assistant Commissioner that the price was ₹ 715 and not ₹ 1,100. But it made use of this finding that the shares were not stock-in-trade not in order to support the decision of the Appellate Assistant Commissioner but to arrive at a conclusion which is different from the conclusion arrived at by the Appellate Assistant Commissioner and which conclusion is prejudicial to the assessee, viz., that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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