1962 (12) TMI 78

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..... ry Ltd. and Karam Chand Thapar and Sons Ltd. The Standard Refinery and Distillery Ltd. is a company carrying on the business of sugar refinery and distillery and also sugar manufacturing. Karam Chand Thapar and Sons Ltd. is an investment company. The assessee company was carrying on business in various lines. As I will presently mention, it has been found as a fact that one of the objects of its incorporation was dealing in shares. The Standard Refinery and Distillery Ltd., purchased 41,300 shares of the New Savan Sugar and Gur Refinery Co. Ltd. at a price of ₹ 12,17,006 during the period between January and April, 1946. In April, 1947, the entire block of shares was sold to the assessee company at ₹ 8,46,750. On 28th June, 1948 .....

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..... d to be dealing in shares and the profits with respect to those dealings were brought to tax. 2. The shares were purchased with borrowed money. 3. Both the purchases and sales were at the prevailing market rate. 4. One of the objects of the assessee company was to carry on business in dealing in shares. After having found these facts, the Tribunal considered the findings of the Income-tax Officer and disagreed with it. It was observed that these shares may have ultimately come to Karam Chand Thapar and Sons Ltd., an investment company, or the managing agents, Messrs. Karam Chand Thapar and Bros. Ltd., may have been influencing the purchase and sales. But these facts by themselves did not prove that the assessee company had purchased .....

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..... he way that the case was run before the Income-tax Officer was that the shares were purchased for the purpose of investment and that the amount concerned was an investment loss. On the facts found it is certainly possible to come to the conclusion that the shares were not purchased by way of investment. On the facts found the Appellate Tribunal could reasonably come to the conclusion that the shares were not purchased by way of investment but inasmuch as one of the objects of the company was carrying on business as dealers in shares, the sale and purchase of these shares constituted an ordinary business transaction and the loss incurred was a trade loss. Since the shares were purchased and sold at market rates, it is very difficult to under .....

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