- (1.) Civil Appeal No. 1126 of 71 by special leave arises from the decision of the High Court of Calcutta in a reference Under Section 66(1) of the Indian Income Tax Act, 1922 hereinafter referred to as 'the Act'. The assessment year with which we are concerned in this appeal is 1955-56, the previous year ending on March 31, 1955.
(2.) The facts as found by the Tribunal are as follows: During the relevant previous year the assessee sold 2500 shares of M/s. Karam Chand Thapar & Sons Ltd, which had been purchased by them in three lots 100 shares on 20th May. 1941, 1300 shares on 17th September, 1941 and 100 on 31st March, 1950. The total price paid for these shares was Rs. 2,54, 592/ The entire block of the said shares was sold to M/s. Mugneeram Bangur & Co on March 4, 1945 for a sum of Rs. 1,50,000/-. The assessee there by suffered a loss of Rs. 1,04,592/-. It claimed that the loss was a trading loss. The Income-tax Officer did not accept the assessee's claim. He opined that the transaction in question was not a genuine transaction and further even if it is a genuine transaction the loss incurred is a capital loss. In appeal the Appellate Assistant Commissioner did not agree with all the findings reached by the In-come-Tax Officer.He came to the conclusion that the sale transaction was genuine but the loss incurred was a capital loss On a further appeal the Tribunal agreed with the Appellate Assistant Commissioner's conclusion that the loss in question was a capital loss. Hence it did not go into the question whether the transaction was a genuine one. It assumed that it was genuine. It found the following facts: (1) 2400 shares were purchased in the year 1941. (2) They were the shares of a company managed by the assessee. (3) All these shares were sold on 4-3-1955. (4) These shares were shown in the account books of the assessee as investments shares. (5) They were also shown in the Balance-sheet as investments and. (6) They were not sold when the price of those shares were high. On the basis of these findings it reached the conclusion that the loss incurred is a capital loss as those shares were purchased as investments shares.
(3.) Whether a particular loss is a capital loss or a revenue loss is a mixed question of law and facts. It is difficult to lay down any cut and dry principles for deciding that question. It depends upon the facts and circumstances of each case. Generally speaking the decision depends on the inference to be drawn from the facts found by the Tribunal. All that we have to see is whether the inference drawn by the Tribunal on the facts found by it is a reasonable inference.;