Issues: Assessment of profits from the purchase and sale of shares as business profits, Material to support the finding of the Appellate Tribunal that the assessee was a dealer in shares and securities, Taxability of profits and transactions of sale and purchase of shares and securities as profits of business.
Analysis: The judgment pertains to an appeal against the High Court's decision answering questions under section 66(2) of the Indian Income-tax Act against the appellant. The appellant, son of the late Maharajadhiraja of Darbhanga, invested surplus cash in shares and securities, leading to profits in various accounting years. The High Court divided the transactions into three periods and assessed the profits made by the appellant from the purchase and sale of shares. The Income-tax authorities held the profits liable to income-tax as business profits, and the Appellate Tribunal upheld the assessments for certain years.
The appellant argued that his activities were not a business but investments of surplus monies, resulting in capital receipts. He relied on precedents to support his stance. The High Court, considering the material before the Tribunal, found the appellant to be a dealer in shares and securities, making the profits assessable to income-tax. The appellant's argument that the profits were capital accretions and not assessable was dismissed based on the nature of the transactions and evidence presented.
The judgment emphasized the substantial nature of the transactions, the maintenance of books, and the magnitude of shares purchased and sold as factors supporting the Tribunal's conclusion that the appellant was dealing in shares as a business. The second question raised by the appellant was deemed unsubstantial, with the Tribunal's findings based on the appellant's activities and holdings. The High Court upheld its decision against the appellant, dismissing the appeals with costs.
In conclusion, the judgment affirms the taxability of profits from the purchase and sale of shares as business profits, supported by the appellant's activities and the nature of transactions. The appellant's arguments regarding capital receipts were rejected, and the High Court's decision was upheld, leading to the dismissal of the appeals.
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