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TMI Blog1990 (12) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee HUF purchased the shares with full knowledge that it would be incurring losses on these shares and consequently the claim of loss was not genuine. The claim of the assessee was accordingly rejected by the assessing officer as per the directions of the Inspecting Assistant Commissioner. 4. Commissioner of Income-tax (Appeals) found that the assessee vide its letter dated21-10-1982had given details of the opening balance of shares, their purchase, sale etc. The names of the companies, number of shares and the value of shares had also been disclosed in the statement. Commissioner of Income-tax (Appeals) further noted that in its letter dated13-10-1982the assessee had given the history of its share business. He, therefore, did not find any substance in the finding of the assessing officer that the details were not furnished by the assessee before him. CIT (Appeals) further found that the rates quoted by the company showed that the assessee's sale price was not less than the prevailing market price. He, therefore, held that the loss of Rs. 2,00,287 suffered by the assessee on the sale of shares was a genuine loss. As regards the question whether the loss should be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d within three weeks of their purchase on11-4-1978thereby resulting in a loss of Rs. 55,497 to the assessee. Similarly, it was submitted that the assessee purchased 45,000 shares of Mahalaxmi Sugar Mills Co. Ltd. on23-3-1978out of which 25,000 shares were sold on24-5-1979resulting in a loss of Rs. 34,987. Thus, the submission was that it was argued that the assessee purchased 43,500 shares of M/s. Gangeshwar Ltd. on7-12-1978and all the shares were sold on10-3-1980resulting in a loss of Rs. 1,65,300. It was also pointed out that out of the 45,000 shares purchased of M/s. Mahalaxmi Sugar Mills Co. Ltd. on23-3-1978the balance 20,000 shares were sold on24-5-1979resulting in a loss of Rs. 34,987. Thus the submission was that the loss incurred for assessment year 1979-80 amounting to Rs. 1,12,309 and the loss of Rs. 2,00,287 for assessment year 1980-81 could not be said to be business loss as these did not arise out of any commercial expediency. It was vehemently argued that if the purpose of the assessee was to promote business or to facilitate its operations with the sugar mills then there was no point in disposing of the shares in a few days or in a few months of their purchase. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red loss on sale of shares out of commercial expediency and that it should be allowed as a business loss. 7. We have carefully considered the rival submissions as also the facts on record. Each case has to be decided on its own facts. We have, therefore, to decide this case also on the basis of its own facts. 8. It has been admitted by the learned counsel for the assessee that the assessee was not dealing in shares. We would, therefore, not go into the question whether the assessee was a dealer in shares and whether the shares were being held as stock-in-trade. The Revenue has not questioned the genuineness of the transactions and the CIT (Appeals) has also found that the assessee had furnished full details regarding purchase, sale etc. of shares. The only question to be decided by us is whether the CIT(A) was justified in directing the Income-tax Officer to allow the loss of Rs. 2,00,287 as revenue loss. We find that the assessee had purchased shares only of the three above-mentioned companies. Only 92 shares of M/s. RBL Tirath Ram Shah (India) had been purchased and these were not sold up to31-3-1980relevant to assessment year 1980-81. The main shares were, however, of M/s. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant to assessment year 1978-79. Thus, in the absence of purchase of any shares the assessee had earned gross commission of Rs. 1,23,975 for a period of about 6 months. If the commission increased to more than Rs. 3,00,000 in the subsequent years it was a normal feature and there was nothing unusual, extraordinary or spectacular about the increase in the commission income as a result of the purchase of shares. 9. The case of Patnaik Co. Ltd. was decided on its own facts which are distinguishable. In that case the assessee was told that if it subscribed for the Government loan, preferential treatment would be granted to it in the placing of orders for motor-vehicles required by the various Government departments and to the further benefit of an advance from the Government up to 50 per cent of the value of the orders placed. Pursuant to that understanding, an advance to the extent of Rs. 18,37,062 was received by the assessee and a circular was also issued by the State Government to various departments to make purchases of the vehicles required by them from the assessee. It was also noticed that the sales shot up substantially. On September 4, 1961 the assessee made a deposit o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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