9911796707
TMI Blog1971 (8) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... K. S. HEGDE. JUDGMENT The judgment of the court was delivered by HEGDE J.--This appeal by certificate arises from the decision of the High Court of Calcutta in (Special Jurisdiction Income-tax) Matter No. 9 of 1963 on its file. That was a reference made to the High Court under section 66(1) of the Indian Income-tax Act, 1922, to be hereinafter referred to as " the Act ". Two questions were referred to the High Court by the Tribunal. They are : " (1) Whether, on the facts and in the circumstances of the case, the proceedings under section 34(1)(b) of the Indian Income-tax Act, 1922, were validly initiated and the assessment made pursuant to the said proceedings was legal and valid ? (2) Whether, on the facts and in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. The learned counsel for the assessee admits that the words should still be considered to be there. We have also examined the vouchers for the sale of shares by the assesseecompany. In those vouchers, the sales are mentioned as those of investments. In the vouchers, the word ' Investment' has neither been scored out nor erased. Further, it appears that in all the past years, the shares held by the assessee have been shown under the head of investment in the balance-sheet and none were shown as stock-in-trade. For example, in the balance-sheet for the year ended 30th September, 1951, shares worth Rs. 43,97,932 have been shown as investments (at cost). It is only for the first time in the balance-sheet for the year ending 30th September, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he underlined expression in this resolution is not only unnecessary but also contradictory in the context of the previous resolutions on the subject. The addition of this expression undoubtedly gives the impression that it was deliberately inserted to prepare a case for the claim that the loss which had by now been sustained on the sale of the other shares should be treated as a loss in share-dealing and, perhaps, as a corollary, the word 'investment' in the earlier resolutions for acquisition had been scored out. In any case, this specific mention can only relate to shares which were acquired and held as stock-in-trade, but so far as the shares on the sale of which the loss had been incurred were concerned, they were acquired as a measure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re with those findings. The High Court's summary of the reasons which persuaded the Tribunal to come to the conclusion that those shares are investment shares is found at pages 81 and 82 of the print. They are : (1) that the assessee had treated the shares as its investments in earlier years; (2) that even in the year of account, the resolutions of the assessee's board of directors approved the purchases of the shares, on the sale of which the loss arose, as investments ; (3) that the sale vouchers showed the sales as sales of investment ; and (4) that the negotiation for the sale of these shares were completed in June and the assessee was aware of the loss arising from such sales and that the resolution of the 27th August, l952, wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l was placed by the assessee to show that the description of the shares given therein was a mistake. It is true that the name given to a transaction in a document is not conclusive as to its true character, but in the absence of a satisfactory explanation it was open to the Tribunal to rely on the admission of the assessee in its own record. It may also be noted that the resolution of August 27, 1952, was passed only after several of the shares had been sold at losses and when the assessee had reason to think that the price of the shares is going down in the market. That being so, that resolution, instead of assisting the contention of the assessee, in our opinion, goes to show that the assessee was only making an attempt to convert its c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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