1992 (2) TMI 57

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..... idual income of the assessee from capital gains ? (2) Whether the Tribunal was justified in law in holding that, while determining the income falling under the head 'Capital gains', the Income-tax Officer was bound to consider the capital loss which had arisen in the hands of the trust as, unless the said loss is taken into consideration, the assessee's total income cannot be computed in accordance with law ? " The respondent-assessee is a beneficiary under the Veenaben Vadilal Trust. The assessee possessed shares of Sayaji Mills Limited. As a shareholder of Sayaji Mills Limited, she got 186 shares of Rajesh Textile Mills Limited. The trust also held shares of Sayaji Mills Limited and, as shareholder, it got 157 shares of Rajesh Textile .....

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..... Appellate Assistant Commissioner, following the decision of the Tribunal in Income-tax Appeal No. 1206 (Ahd)/70-71, held that the assessee was entitled to the deduction of the fall in value of shares in Sayaji Mills Limited while computing the capital gain in respect of shares of Rajesh Textile Mills Limited. Therefore, the addition of Rs. 2,139 made by the Income-tax Officer was ordered to be deleted and he was directed to verify the claim of capital loss made by the assessee and allow the same. As regards the similar claim made in respect of sale of 157 shares of Rajesh Textile Mills Limited by the trustee, the Appellate Assistant Commissioner did not accept the assessee's contention and agreed with the finding of the Income-tax Officer .....

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..... come-tax Officer for recomputation of the capital loss arising to the assessee on sale of the shares of Rajesh Textile Mills Ltd.?" The Tribunal has referred the two questions to this court, but declined to refer the third question by holding that remitting the matter to the Income-tax Officer for recomputation was only consequential in nature and no question of law arose as a result of that part of the order. What is contended by learned counsel for the Revenue is that the beneficiary under a trust is entitled to enjoy the benefits of the trust and the loss suffered by the trust cannot be passed on by the trustees to the beneficiary. It is submitted that the loss suffered by the trust cannot be regarded as a loss of the assessee who wa .....

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