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TMI Blog1970 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee for acquiring the managing agency, the assessee had to purchase the shares of the managed-company at an agreed price of Rs. 525 per share. For the assessment year 1947-48, the assessee claimed a huge loss of Rs. 21 lakhs and odd due to the revaluing of the shares. of the managed-company at Rs. 273-12-0 per share as against the purchase price of Rs. 525 per share. The loss was disallowed by the Income-tax Officer on the ground that it was capital loss. The same view was taken by the Income-tax Officer for the assessment years 1948-49 and 1949-50. When the assessee took up the matter in, appeal, the Income-tax Officer conceded before the Appellate Assistant Commissioner that the loss on revaluation of the shares of the Meyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o question of adjustment arose, because the losses in question were capital losses and not revenue losses. This point was abandoned by the department before the Tribunal. Whether a certain loss is a capital loss or revenue loss is a mixed question of fact and law. Since the point was abandoned before the Tribunal, the Commissioner cannot be permitted to raise the point at this stage that the loss of earlier years was capital loss. We would proceed on the assumption that the loss of earlier years was revenue loss. In Setabganj Sugar Mills, Ltd. v. Commissioner of Income-tax it was explained by the Supreme Court that in order to determine whether different ventures can be said to constitute the same business, what one has to see is whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee also carried on speculation in gold, silver and other commodities. The assessee claimed that the various activities constituted one business, and relied on the following six factors : (1) that only one set of accounts was maintained for receipts and withdrawals ; (2) that both the businesses were carried on in the same premises ; (3) that they were carried on with the help of the same staff ; (4) that the capital employed for both the businesses was the same ; (5) that receipts in respect of one of them were utilised for the purpose of the other indiscriminately ; and (6) that the terms of overhead and other expenses were common. It was held by the Bombay High Court that these six factors relied upon by the assessee did not necessarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of shares was, therefore, loss of a capital nature. It will be seen that in the case of Ramnarain Sons (Pr.) Ltd., the main question before the court was whether certain loss was of a capital nature or of a revenue nature. We have shown above that in the present case we have to proceed on the footing that the loss of earlier years was revenue loss. It has been found that the shares in question were stock-in-trade. Consequently, the decision of the Supreme Court in the case of Ramnarain Sons (Pr) Ltd., is not of much assistance to the department. In E. D. Sassoon Co. Ltd. v. Commissioner of Income-tax, the firm, E. D. Sassoon Co., was doing business as bankers, commission agents, dealers in shares and securities and foreign exchange ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Meyer Mills Ltd. (2) The assessee maintained a single set of accounts for the two activities. (3) Purchase of shares and acquisition of managing agency were simultaneous. The assessee had to purchase the shares of the managed-company at an inflated price under the terms of the agreement, under which the assessee acquired the managing agency. (4) Ninety-five per cent. of the shares held by the assessee related to Meyer Mills Ltd. (5) There was no allocation of interest between the managing agency and the shares of the managed-company. (6) The shares were acquired and managing agency was obtained in the year 1946. After a few years the assessee started liquidating the shares. The assessee soon gave up the managing agency. (7) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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