Y.R.Meena, J. - (1.) On an application under Section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following question set out at page 2 of the statement of case for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding' that loss of Rs. 1,05,489 on account of sale of shares was genuine ?"
(2.) The assessment year is 1984-85. During the course of assessment, the Assessing' Officer noticed that the assessee has claimed a loss of Rs. 1,05,489 on account of loss on sale of shares. The Assessing Officer has referred the details of purchase and sale of the shares and made annexures in the assessment order. The Assessing Officer further found that there were two sets of share brokers--one set of M. L. Santhalia and Sew Karan Dhelia. The shares are of J. K. Synthetics Ltd., Tata Tea Ltd., Hindustan Aluminium and Gwalior Rayon Co. These shares were purchased by the assessee from M. L. Santhalia and the entire lot was sold to Sew Karan Dhelia. Another set of brokers consisted of R. Rameshwarlal and J. M. Choudhury. The assessee purchased shares of India Steamships Ltd., Escorts Ltd., Metal Box and Kesoram Industries from Prahlad R. Rameshwarlal and the entire lot of shares was sold to J. M. Choudhury. The assessee was directed to produce the brokers. He could not produce the brokers and requested for issue of summons under section 131 of the Income-tax Act. Dhelia and Santhalia--they did not comply with the summons. Prahlad R. Rameshwarlal appeared with books. After examination of the broker, Rameshwarlal, and in the absence of other brokers, i.e., Santhalia and Dhelia, the Assessing Officer came to the conclusion that the transaction in shares is not genuine. Therefore, he disallowed the aforesaid loss.
(3.) In appeal before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) also has upheld the order of the Income-tax Officer on this account that the share loss is not genuine.;