9911796707
TMI Blog1969 (8) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... are dealing business. During the assessment year 1954-55, relevant accounting period being the financial year 1953-54, the assessee suffered a loss of Rs. 1,11,816 on the sale of 1,575 preference shares of Fort William Jute Company Ltd. These shares were purchased on May 22, 1952, at the rate of Rs. 186 per share from Mugneeram Bangur and Co. and were sold on December 23, 1953, at the rate of Rs. 115 per share to the same company. The background in which these transactions took place may be noticed. Kettlewell Bullen and Co. were the managing agents of Fort William Jute Co. Ltd. On May 21, 1952, an agreement was entered into between Kettlewell Bullen and Co. and Mugneeram Bangur and Co. according to which the entire holdings of Kettlewell Bullen and Co. in the managed company (Fort William Jute Co. Ltd.) consisting of 6,920 tax-free cumulative preference shares and 600 ordinary shares were to be sold to Mugneeram Bangur and Co. or their nominees at the agreed price of Rs. 185 per preference share and Rs. 400 per ordinary share. Pursuant to this agreement Kettlewell Bullen and Co. issued a circular letter to all shareholders of Fort William Jute Co. Ltd. informing them of the ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of the assessee's normal business of dealing in shares. The Appellate Tribunal found that there was no evidence that the assessee had been made a pawn in the scheme of acquisition of the managing agency of Fort William Jute Co. Ltd. by Mugneeram Bangur and Co. or that the shares were acquired by the assessee to relieve the latter of the load of their shares in pursuance of that scheme. The Tribunal was further of the view that even if Mugneeram Bangur and Co. had a controlling interest in the assessee-firm by having a majority of the shares in it no such inference could necessarily be raised that the assessee did not purchase the shares of Fort William Jute Co. Ltd. as a measure of its own activity as a dealer in shares. The Tribunal, however, held that the shares were not acquired in the course of the assessee's share dealing business for the reason that in the profit and loss account for the year ending March 31, 1954, the assessee had made a distinction between its transactions as a dealer and as an investor in shares. The Tribunal found that while the profit on sale of shares out of its stocks-in-trade had been shown and described as such in the profit and loss account, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view of the Tribunal that on the basis of entries in the profit and loss account it could be held that the share transactions in question related to the capital account, the shares having been acquired as a measure of investment. The first contention raised on behalf of the assessee, which is the appellant before us, is that the High Court was not entitled to reverse the findings of fact of the Appellate Tribunal since the department had not challenged the same by means of appropriate proceedings for reference of a question challenging those findings. It is pointed out that the Tribunal had come to the conclusion that there was no evidence to show that the assessee had been made a pawn in the scheme of acquisition of the managing agency of Fort William Jute Co. by Mugneeram Bangur and Co. or that the preference shares had been acquired by the assessee pursuant to that scheme. It is submitted that the Tribunal had thus reversed the view which had commended itself to the Income-tax Officer and the Appellate Assistant Commissioner and to that extent the Tribunal's decision was in favour of the assessee and could not be reversed or set aside by the High Court in the absence of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een made of a specific question concerning that finding. In Oriental Investment Co. P. Ltd. v. Commissioner of Income-tax it has been reiterated that in dealing with findings on questions of mixed law and fact, the High Court must accept the findings of the Tribunal on the primary question of fact as final although it is open to the High Court to examine whether the Tribunal had applied the relevant legal principles correctly. It is argued that the High Court has not characterised the aforesaid finding of the Appellate Tribunal as perverse or arbitrary and once that finding is accepted there would be no justification for holding that the assessee had been made a pawn in the matter of the scheme of transfer of the managing agency of Fort William Jute Co. Ltd. by Mugneeram Bangur and Co. or Bangur Brothers Ltd. In any case there were several facts which showed that the assessee was not privy or party to the aforesaid scheme. It did not acquire any interest in the managing agency nor was it a subsidiary or associate of Mugneeram Bangur group of concerns. The assessee was connected with the Bangurs only to the extent that out of its four directors two of the directors were Bangurs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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