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TMI Blog1973 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1959-60 for which the previous year is the year ending 31st March, 1959. For that year a return was filed showing a total income of Rs. 20,063. The assessee-company is a dealer in shares. Before the Income-tax Officer, the assessee claimed deduction on account of loss of Rs. 36,035 consisting of alleged loss of Rs. 26,565 on sale of 1,000 preference B shares of, S. K. G. Sugar Co. Ltd. and of loss of Rs. 9,470 on sale of 250 preference shares of Bengal Jute Co. Ltd. The Income-tax Officer found that 1,000 shares of S. K. G. Sugar Co. Ltd. had been purchased from Mugneeram Bangur & Co. on 28th March, 1951, at Rs. 91 per share. On 19th September, 1958, these shares were sold to Mugneeram Bangur & Co. at Rs. 65 per share giving rise to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate artificial losses. There was an appeal to the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner, it was contended that the assessee had all along been held to be a dealer in shares and the shares under consideration had all along been treated by the assessee as a stock-in-trade and the dealings in shares was its main business. This contention was not opposed, it appears, before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner further observed that the shares had been purchased at the market rate and the intention at the time of purchase could only be made out by the subsequent course of dealings. The Appellate Assistant Commissioner further observed that it was the assessee's conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner, referred to hereinbefore, and observed that, on the facts found by the Appellate Assistant Commissioner, it saw no reason to interfere with the findings in regard to the share-dealing losses which arose in the first year, viz., the assessment year 1958-59, with which we are not concerned in this reference. As regards the second year, that is the year in question with which we are concerned, viz., the assessment year 1959-60, the Tribunal observed that the shares were preference shares and it had been held for a long period. For these factors the Tribunal was of the opinion that the Income-tax Officer was justified in treating these as investment shares. The Tribunal further observed that even a share dealer could have investments and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee in its share-dealing business. Furthermore, it appears, in respect of these shares the assessee had been treated as a dealer in shares. Indeed in the statement of the case which has been filed before this court after hearing both the parties, the Tribunal records that the assessee is a dealer in shares. Therefore, it appears that the facts that emerged in this case were that the assessee was a dealer in shares and it was contended before the Appellate Assistant Commissioner and nothing was shown to the contrary by the department that these shares were not acquired as a stock-in-trade by the assessee and the assessee had been treated as such by the department in respect of these shares. As against these, there are two factors which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of investment or sale in the ordinary course of business. It is observed by the Supreme Court in Investment Ltd. v. Commissioner of Income-tax, that the mere length of time might not be a determining factor. The Supreme Court had also considered this question in the case of New Era Agencies (Private) Ltd. v. Commissioner of Income-tax. There the Supreme Court was dealing with the preference shares ; this fact has to be noted, because in this case we are concerned with preference shares and these shares had been hold for a considerable time. The Supreme Court observed that the fact that the appellant had not dealt with the shares for about 14 years from 1949 to 1963 would not be sufficient to draw the inference that the assessee had treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut in the bank and purchases were made. This, however, is consistent with the fact of the assessee being either an investor or a trader in shares. It was contended before the Appellate Assistant Commissioner that the assessee had all along been treated as a dealer in shares in respect of these shares and these shares had been treated as stock-in-trade of the assessee. The Appellate Assistant Commissioner seems to have accepted the contention and the Tribunal has not negatived this contention. (iv) Therefore, the fact remains that these shares were acquired as stock-in-trade of the assessee. (v) The shares of S.K.G. Sugar Ltd. were held for about 7 1/2 years and had been sold at the available market price. (vi) The shares of Bengal Jute M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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