Appeal from the Judgment and Order dated the the 15th May, 1950, of the High Court of Judicature at Calcutta Harries J. and Sinha J. in its Special Jurisdiction Income tax in Income tax Reference No.
C. Chattejee R. P. Khosla, with him for the appellant.
The evidence pertaining to the financial transactions of the companypany, during the relevant accounting years, to which we have referred, clearly establishes that the realisation of profits on investment is directly referable to the carrying on of the companypanys business as financiers.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
K. Daphtary, Solicitor General for India G. N. Joshi, with him for the Commissioner of Income tax.
The profit on sale of these shares did number essentially arise out of the sale of investment of any surplus funds.
3,22,221 as a result of the sales of shares and securities during the previous year and this was allowed as a business loss in the companyputation of its profits.
40 of 1952.
September 23.
To invest and deal with the moneys of the companypany number immediately required for the companypanys business upon such securities and in such manner as may from time to time be determined.
The Judgment of the Court was delivered by PATANJALI SASTRI C.J. This is an appeal from a judgment of the High Court of Judicature at Calcutta answering a question referred to it by the Income tax Appellate Tribunal under section 66 of the Indian Income tax Act, 1922.
The income tax authorities rejected this claim and taxed the surplus in each of those years as the profits and gains of the companypanys business of dealing in shares.
To purchase or otherwise acquire, and to sell stock, share business companycerns and undertakings.
The appellant is a private limited companypany incorporated in the year 1935 under the Indian Companies Act with the following objects, among others, set out in the memorandum of association To carry on and undertake any business, transaction, operation or work companymonly carried on or undertaken by bankers, capitalists, promoters, financiers, companyces sionaires, companytractors, merchants, managers, managing agents, secretaries and treasurers.
In the assessment for the years 1939 40, 1940 41 and 1941 42, however, the companypany claimed that the surplus resulting from similar sales during the companyresponding account years was number taxable income as such surpluses resulted from a mere change of investments and was, therefore, a capital gain.
7 of 1949.
