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TMI Blog1967 (4) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal had referred the following question : Whether, on the facts and circumstances of the case, the surplus derived by the assessee in the sale of its shares and securities in the relevant previous years was a revenue receipt and as such taxable under the Income tax Act ? We are unable to answer this question without calling for a supplementary statement of the case. The relevant facts and circumstances which are mentioned in the statement of the case are as follows : The assessee was incorporated on 3rd April, 1947, and the principal activity was investment of its capital in shares and stocks. It changed its investments by sale of its shares and stocks from time to time. The income of the company was derived from dividen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of the Appellate Assistant Commissioner. In paragraph 5 of the statement of the case the contentions of the assessee before the Tribunal are stated as follows : Before the Tribunal, the appellant repeated its contention that, in the relevant previous years, the company was actually changing its investments and it was not dealing in shares. The applicant explained that in the previous years, relevant to the assessment year 1953-54, the control of McLeod Co. Ltd. went out of the hands of the directors of the company. It was stated that certain persons, who wanted to acquire the majority of the shares in M/s. McLeod Co., approached the applicant-company and offered prices which were much higher than that quoted in the market at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eod Co. When we turn to the order of the Income-tax Appellate Tribunal disposing of the appeals we find, that after setting out four clauses of the memorandum of association specifying the objects of the assessee, the Tribunal observed : In accordance with these objects of the company it invested in shares of various companies. From time to time it purchased shares and also sold some shares presumably for the purpose of making a change in investment in years prior to the assessment years under our consideration. Then the order sets out the various sales and purchases during the relevant assessment years and the contentions of the assessee. Here again it is not stated whether the Tribunal accepts the assessee's contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual or a company or any other entity, must carry on business in respect of shares ; that is to say, the assessee must deal in those shares. It is evident that if an individual person invests in shares for the purpose of earning dividend he is not carrying on a business. The only way he can come under section 10 is by converting the shares into stock-in-trade, i.e., by carrying on the business of dealing in stocks and shares as did the assessee in Commissioner of Income-tax v. Bai Shirinbai K. Kooka. Further, the Tribunal has not stated what was the object of the assessee in buying 6,900 ordinary shares of McLeod Co. It appears from the order of the Income-tax Officer that these shares were purchased in a number of lots from the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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