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TMI Blog1971 (8) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and in the circumstances of the case, the proceedings under section 34(1)(b) of the Indian Income-tax Act, 1922, were validly initiated and the assessment made pursuant to the said proceedings was legal and valid ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the loss of Rs. 5,14,295 on the sale of shares did not arise to the assessee from a share-dealing business but was a loss on realisation of investment ?" The High Court answered both these questions in favour of the department and against the assessee. Aggrieved by that decision, the assessee had brought this appeal. The relevant assessment year is 1953-54, the previous year ending in September/October, 1952. So f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d none were shown as stock-in-trade. For example, in the balance-sheet for the year ended 30th September, 1951, shares worth Rs. 43,97,932 have been shown as investments (at cost). It is only for the first time in the balance-sheet for the year ending 30th September, 1952, that the assessee has shown the investments in two parts : (1) investments held as stock-in-trade, and (2) investments held as investments. All the shares of M/s. Lothian Jute Mills Co. Ltd., M/s. Albion Jute Mills Co. Ltd., M/s. New Central Jute Mills Co. Ltd. and others which had been shown as investments (at cost) in the balance-sheet of the earlier year have been shown as investments held as stock-in-trade in the balance-sheet as on 30th September, 1952. It is only in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns for acquisition had been scored out. In any case, this specific mention can only relate to shares which were acquired and held as stock-in-trade, but so far as the shares on the sale of which the loss had been incurred were concerned, they were acquired as a measure of investment. Accordingly, the assessee's contention that all the other previous holdings were as stock-in-trade cannot be accepted. The negotiations for the sale had been finalised on 12th June, 1952, and the assessee was fully aware of its position regarding the loss on the sale of these shares. From an examination of the records in the minutes books and the relevant vouchers pertaining to the transactions, we have not the least doubt in our mind that the purchase of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) that the sale vouchers showed the sales as sales of investment ; and (4) that the negotiation for the sale of these shares were completed in June and the assessee was aware of the loss arising from such sales and that the resolution of the 27th August, l952, was an attempt by the assessee to convert a capital loss into a trading loss. In our opinion, the High Court rightly approached the issue before it. The only question the High Court had to consider and that we have to consider in this appeal is whether the finding of the Tribunal that the shares in question were investment shares---a finding which is essentially finding of fact---is vitiated for any reason. In other words, we have to examine whether that finding is unsupporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the assessee had reason to think that the price of the shares is going down in the market. That being so, that resolution, instead of assisting the contention of the assessee, in our opinion, goes to show that the assessee was only making an attempt to convert its capital loss into a trading loss. It is not this court's function to re-examine the evidence on record. That was the function of the Tribunal. All that we have to see is whether the Tribunal had departed from the well-established principles in arriving at its finding. We are not satisfied that the Tribunal's finding is open to correction by this court on the facts and circumstances of this case. In the result this appeal fails and the same is dismissed with costs. Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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