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TMI Blog1990 (11) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the finding of the Tribunal that the assessee commenced its share dealing business on November 12, 1966, was supported by any evidence on record ? " The facts leading to this reference are stated hereafter. The assessee is a private limited company. It passed a resolution at the meeting of its board of directors on June 10, 1967, that 2,800 shares in Indian Iron and Steel Co. Ltd., 69,665 shares in Binani Metal Works Ltd., 93 shares in Multimetals Ltd., 1,130 shares in Metal Distributors Ltd., 200 shares in Metal Corporation of India Ltd. and 1,000 shares in Wellman Incandescent India Ltd., which were hitherto held as investment, may from now onwards be held as stock-in-trade and that appropriate transfer entries be made in the account books for this purpose. It was further resolved that the transfer entries should be made on the basis of the market value of the shares on the date of the resolution, i.e. June 10, 1967, and the value of these shares on the last day of each accounting year should be taken on the basis of the cost or market value, whichever was lower. On this basis, transfer entries were made in the books of the company and the assessee claimed a loss of Rs. 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June 10, 1967, and June 9, 1967, could not be known on those dates or on June 10, 1967, i.e., the date on which the transfers were made by the appellant to the trading account. Unless the final position is known, the amount of dividend expected to be declared could not be guessed correctly and so it cannot be said that the rates at which the appellant made the transfers were cum-dividend quotations. Besides, it is not mentioned in the assessment order that the Income-tax Officer's finding is that the rates were cum-dividend rates on the basis of quotation in the stock exchange. In the circumstances, it cannot be said that the transfer of shares in M/s. Binani Metal Works Ltd. and M/s. Metal Distributors Ltd. by the appellant were not at normal rates. Hence, the excess price considered by the Income tax Officer but not added is not required to be deducted from the deduction allowed in the earlier part of this order." The Department appealed to the Appellate Tribunal and it was contended that, even prior to June 10, 1967, the assessee-company had sold 41,800 shares in Multimetals Ltd. for Rs. 4,15,492. According to the Department, it was not correct to ignore this transaction whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... large sales of 41,800 shares in Multi metals Ltd. on May 6, 1967, i.e., prior to June 10, 1967, for Rs. 4,15,492. The Revenue authorities were, therefore, in our opinion, entitled to hold that the business of dealing in shares did not commence from June 10, 1967, but earlier. Once the claim of the assessee is found to be incorrect, it was for the assessee to establish the date from which the business of dealing in shares commenced. Here, it is necessary to point out that the assessee's claim that it did not have any business prior to June 10, 1967, was not correct as already described above and it had account books in which there were other business losses also apart from the business in dealing in shares which started on November 12, 1966, and ended on November 1, 1967. In these circumstances, according to our view, the Income-tax Officer was justified in holding that the business of dealing in shares also commenced on November 12, 1966, and in recasting the trading account in share dealing accordingly. The addition made by the Income-tax Officer on this account, therefore, appears to be justified and was wrongly deleted by the Appellate Assistant Commissioner whose order is rever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced its business in share dealing only on the day on which such resolution was passed. We are of the view that the Tribunal was right in holding that it was for the assessee to establish the date from which the business of dealing in shares commenced. Since the assessee was engaged in several business activities and since its relevant previous year commenced on November 12, 1966, we do not think that the order of the Tribunal can be said to be perverse in so far as it held that the assessee must be deemed to have commenced its business on the lst day of the accounting year relevant to the assessment year under reference. It is not necessary to see the order of the Tribunal through a microscope. The Tribunal found that there was large scale sale of shares in May, 1967, or before June, 1967. The assessee did not show evidence as to from which date the business of share dealing commenced. In other words, the assessee did not come with clean hands. The assessee had account books in which there were other businesses apart from the business in dealing in shares which commenced on November 12, 1966, and ended on November 1, 1967. The assessee could have shown from its account books for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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