9911796707
TMI Blog1990 (12) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... oss? 2. Shortly stated, the facts are that the assessee is a limited company and derives income from share of profit, dividend, interest, etc. The assessee incurred a loss of ₹ 1,46,136 in shares. It claimed the loss as business loss. The ITO in the original assessment noted that there was a profit to the assessee in the assessment year 1970-71 and the assessee itself claimed this gain as capital gain. The ITO found that the assessee was an investor and hence, the loss incurred by it was capital loss. The assessee's appeal against the order of the ITO was heard by the AAC who set aside the order of the ITO vide his order dated 25-6-1976. Thereafter, the ITO passed a fresh assessment order dated 31-8-1977. In this order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss-objection contended before the Tribunal that the loss incurred by the assessee was a trading loss and relied on several decisions in support of the case. On the other hand, the department supported the order of the Commissioner (Appeals) and urged that the loss was a capital loss. 4. The Tribunal came to the finding that the assessee held several shares in different companies by which the partners of the parent firm became directors in those companies and, accordingly, enjoyed director's fees, remuneration and/or commission. Therefore, the shares were held by the company not in its trading operation. The shares were compulsorily held by the assessee as qualification shares in order to get the directorship. It is also the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is known. The assessee has treated this as investment because the assessee itself claimed the profit in the assessment years 1969-70 and 1970-71 as capital gain. Further, there was no transaction in last 5 years. Under the aforesaid circumstances, the Tribunal was justified in holding that loss earned by the assessee was a capital loss. 6. Mr. Dutt, the learned counsel for the assessee, referred to a decision of the Supreme Court in the case of Patnaik Co. Ltd. v. CIT [19861 161 ITR 365. In that case, the assessee which dealt in automobiles and spare parts, had subscribed to certain Government loans. It sustained a loss of ₹ 53,650 while selling them and claimed that the loss was a revenue loss. The Tribunal found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction cannot reappreciate the evidence. The Court can only go into the question of perversity of finding, if such a question has been raised on the facts found by the Tribunal. On the facts found by the Tribunal, the conclusion is irresistible that the assessee acquired the shares in various companies for obtaining the directorship or ultimate control of the companies. Accordingly, the acquisition of shares was in the investment portfolio. Therefore, the loss, if any, on sale of such shares must be capital loss and the Tribunal was right on facts in coming to the conclusion as it did. 8. For the reasons aforesaid, we answer the question in this reference in the negative and in favour of the revenue. 9. There will, howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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