TMI Blog1988 (9) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer that it was an investor in shares and that the profit or loss arising from the sale of shares was a capital gain or capital loss. The Income-tax Officer found that similar claims made by the assessee in earlier years had been rejected by him and the assessee had been held to be a dealer in shares. He, accordingly, rejected the assessee's claim for this year also. The net result of the dealings in shares was a loss of Rs. 17,405. The Income-tax Officer completed the assessment by treating this loss to be a business loss. The Commissioner subsequently found that the assessee's claim that it was an investor in shares had been accepted by the Tribunal in the appeals for the assessment years 1957-58 to 1961-62. The Commissioner, therefore, felt that the loss of Rs. 17,405 suffered by the assessee in share dealings during this year should have been held to be a capital loss and not a business loss, as held by the Income-tax Officer, while making the assessment. He, therefore, considered the assessment order to be erroneous and prejudicial to the interests of the Revenue and required the assessee to show cause as to why an order under section 263 be not made. The assessee claimed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs holding that the assessee was an investor in shares and that the shares were its capital assets had not been accepted or acted upon by the Commissioner. The Tribunal, therefore, felt that the Commissioner could not be justified in considering that the order passed by the Income-tax Officer holding the assessee to be a dealer in shares was erroneous and prejudicial to the interests of the Revenue. The Tribunal, accordingly, held that the requirements of section 263 had not been satisfied and cancelled the order passed by the Commissioner. At the hearing, Mr. Bagchi, learned advocate appearing for the Revenue, has contended that, for the earlier years, that is to say, for the years 1955-56 to 1965-66, the Tribunal, the High Court as well as the Supreme Court consistently held that the assessee is an investor in shares and, accordingly, the loss, if any, should be on capital account. He has also submitted that, when the Commissioner passed an order under section 263 of the Act, he was aware of the decision of the Supreme Court in the case of the assessee in Karam Chand Thapar and Bros. (P.) Ltd. v. CIT [1971] 82 ITR 899 for the assessment year 1955-56 holding that the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs it necessary' postulate that the authority concerned has thought over the matter deliberately and with care and it has been found necessary as a result of such thinking to pass the order. The dictionary meaning of the word 'consider' is to view 'attentively, to survey, examine, inspect (arch.), to look attentively, to contemplate mentally, to think over, meditate on, give heed to, take note of, to think deliberately, bethink oneself, to reflect' (vide Shorter Oxford Dictionary). According to Words and Phrases (Permanent Edn., Vol. 8A) to 'consider' means to think with care. It is also mentioned that to 'consider' is to fix the mind upon with a view to careful examination ; to ponder, study, meditate upon, think or reflect with care. It is, therefore, manifest that careful thinking or due application of the mind regarding the necessity to obtain and examine the documents in question is a sine qua non for the making of the order. If the impugned order were to show that there has been no careful thinking or proper application of the mind as to the necessity of obtaining and examining the documents specified in the order, the essential requisite to the making of the order would be h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the carry-forward and set-off of losses of earlier years in view of the Income-tax Appellate Tribunal's orders for 1957-58 to 1961-62, the same may be allowed by the Income-tax Officer in accordance with the provisions of the Act. That the assessee is entitled to carry forward earlier years' losses, if any, is not a valid ground against the passing of an order under section 263 for 1963-64. The contentions of the assessees are, therefore, rejected." It will be evident from the said order of the Commissioner that it was never the contention of the assessee for the assessment years 1957-58 to 1961-62 that losses or gains from transactions in shares are not capital losses of capital gains. As a matter of fact, the contention of the assessee was that the losses or gains arising from the transactions should be assessed as capital loss or capital gain, as the case may be. This contention of the assessee has been accepted by the Tribunal. We may also mention that, for the assessment years beginning from 1955-56 till 1965-66, the Tribunal had consistently held that the losses or gains arising from identical transactions would be assessed either as capital losses or capital gains, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
