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Issues involved: Assessment of shares as stock-in-trade or capital investment for the assessment year 1996-97.
Summary: The Assessing Officer initially considered the shares held by the assessee as a long-term capital investment, contrary to the assessee's claim that they were stock-in-trade. The Commissioner of Income-tax (Appeals) reversed this view, determining that the shares were indeed stock-in-trade. A subsequent appeal by the Revenue before the Tribunal was dismissed, leading to an appeal before the High Court under section 260A of the Income-tax Act. During the High Court proceedings, the Revenue's counsel contended that the Tribunal failed to address whether the shares were held as stock-in-trade, focusing instead on the valuation method. However, the High Court noted that the Revenue did not challenge the stock-in-trade classification before the Tribunal, as evidenced by the grounds of appeal submitted. As such, the Tribunal's decision on the valuation method was upheld, as the stock-in-trade status was not disputed before them. Furthermore, the High Court emphasized that the classification of shares as stock-in-trade or capital investment is a factual determination. Since the Commissioner had already concluded that the shares were held as stock-in-trade, the High Court was reluctant to interfere unless there was clear error. Finding no such error, the High Court dismissed the appeals, affirming the Tribunal's decision.
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