in the proceedings for assessment of tax in the assessment years 1945 46 and 1946 47 the income tax officer disallowed the loss claimed holding that the shares formed the appellants capital investment.
these orders were number challenged in appeals to the income tax appellate tribunal.
whether in any event in view of the assessments made for the years 1945 46 1946 47 and 1947 48 and the appellate assistant companymissioners order for these three years it was open to the department to hold for the assessment years 1949 50 that the said shares do number represent the assessees stock in trade ?
whether the tribunal misdirected itself in law in omitting to companysider certain material facts which were taken into account by the appellate assistant companymissioner and expressly maintained in the appellate assistant companymissioners order including the fact that the assessee had been holding shares in several other companypanies as stock in trade and this position has been accepted by the department although in those shares there have been preferred with special leave.
in the assessment year 1947 48 the income tax officer excluded from the return the amount of profit alleged to have resulted to the appellate assistant companymissioner by three orders dated may 4 1951 the shares of the sholapur mills were held to be stock in trade and the profits or losses companyputed according to the method of valuation adopted by the appellants were directed to be taken into account in assessing the taxable income.
the appellants are a registered firm carrying on the business of money lending and speculation in silver and shares.
for the assessment year 1949 50 the appellants furnished their return claiming that they incurred a loss of rs.
by numberember 1948 the appellants held 99 ordinary shares.
they substantially companyfirmed the view of the income tax officer on the facts found.
2002 03 1947 48 profit 72545 nil.
the firm companymenced business in august 1942.
2001 02 1946 47 loss 35468 8 0 nil.
2003 05 1949 50 loss 321831 loss 12020 the appellants submitted their returns for income tax in respect of the assessment years 1945 46 1946 47 and 1947 48 with the income tax officer respectively on july 27 1948 numberember 11 1948 and may 23 1949.
185000 and that the shares being capital investment and number stock in trade the loss companyld number be allowed as a revenue deduction.
2000 01 1945 46 loss 30802 nil.
333851 in the shares of the sholapur mills.
against this order the income tax officer appealed to the income tax appellate tribunal which reversed the order of the appellate assistant companymissioner and restored the order of the income tax officer.
an application submitted by the appellants for a reference under section 66 1 of the income tax act of the following questions was rejected by the tribunal whether the tribunal misdirected itself in law and or acted without any evidence in finding that the investment of the assessee in the shares of the sholapur mills was a capital investment and number its stock in trade ?
in the assessment year 1948 49 the appellants did number furnish return and they were assessed to tax under section 23 4 of the income tax act.
the appellate assistant companymissioner disagreed with the view of the income tax officer and held that the shares were the stock in trade of the appellants but agreeing with the income tax officer he held that the loss had been inflated by rs.
the income tax officer found that the appellants had inflated the loss by rs.
year of account assessment year ordinary shares preference shares maru rs.
the partners of the appellants firm were also partners of messrs.
the appellants also purchased at diverse times 6780 preference shares of the sholapur mills.
during all these years number a single shares ordinary or preference was sold by the appellants.
in samvat year 2000 numberember 1943 to october 1944 the appellants purchased seventeen ordinary shares of the sholapur mills and thereafter they purchased 82 more ordinary shares between numberember 1944 and october 1948.
shah j. this is an appeal with special leave under article 136 of the companystitution against the order of the high companyrt of judicature at bombay refusing to call for a statement of case from the income tax appellate tribunal under section 66 2 of the income tax act.
this was companyputed on the alleged difference between the market value of the shares at the close of the previous year of account and the market value at the end of the accounting period the shares being treated as stock in trade.
all these shares were entered in the books of account of the appellants as stock in trade and valued accordingly at the end of each accounting period.
the following table sets out the profit and loss in respect of these shares calculated by the appellants according to the method of valuation of stock adopted by the appellants.
morarka company who were the managing agents of the sholapur spinning and weaving companypany limited hereinafter called the sholapur mills.
