TMI Blog1995 (3) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... rna Foods Pvt. Ltd. at the rate of Re. 1 per share. Thus, there was a loss of Rs. 2,26,116 which was claimed by the assessee as short-term capital loss. This loss has been disallowed by the Assessing Officer by invoking the Explanation to section 73. The CIT (Appeals) has confirmed the order of the Assessing Officer. Assessee is in appeal before us. 3. The learned counsel for the assessee has argued before us that assessee is not a dealer in shares and it purchased the shares as an investment. Even in the balance-sheet these shares have been shown as investment. It was also stated by him that this was only a solitary transaction and assessee has not dealt in shares of other companies. He drew our attention to the provisions of Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . and 'Income from other sources' or a company the principal business of which is the business of banking or the granting of loans and advances) consists in the purchase and sale of shares of other companies, such company shall, for the purpose of this section be deemed to be carrying on a speculation business to the extent to which the business consists of the purchase and sale of shares." It is well-settled law that the deeming provisions are to be construed strictly and the onus is on the department to bring the case within the four corners of the deeming provisions. A bare reading of the provisions of this Explanation shows that a part of the business of the assessee-company must consist in the purchase and sale of shares of other com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the same. This view is fortified by the Supreme Court judgment in the case of Saroj Kumar Mazumdar v. CIT [1959] 37 ITR 242. In the present case, the transaction entered into by the assessee is a solitary one and the presumption is that it was held as an investment unless rebutted by the department. We have gone through the orders of both the authorities and we do not find an iota of evidence to hold the transaction as a business transaction. Therefore, in our opinion, the provisions of Explanation to section 73 cannot be invoked. 5. Now let us examine the alternate contention of the revenue. It has been held by the Bombay High Court that the Appellate Tribunal has discretion to allow any party of an appeal, may be the appellant or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same was sold within a short period of two months at a very low price to the party in whom he was substantially interested as the vendee was represented by his wife. But in the present case, the shares had been purchased from the company directly and were held for almost three years. As the assessee came to the conclusion that the company, i.e. Annapurna Foods Pvt. Ltd. was not in a position to avoid the losses, it decided to sell the shares. We have also gone through the balance-sheet of Annapurna Foods Pvt. Ltd. for the period ending 30-9-1982 and 30-9-1983 and find that value of the liabilities was more than the value of assets. Therefore, it cannot be held that the shares had been sold with a view to avoid tax. In view of the totality ..... X X X X Extracts X X X X X X X X Extracts X X X X
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