- (1.) ON an application under s. 256(2) of the IT Act, 1961, this Court has directed the Tribunal to refer the following question set out at page of the statement of the case for the opinion of this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding the view that the loss of Rs. 11,79,420 was a short -term capital loss - In compliance of our direction the aforesaid question has been referred for the opinion of this Court.
(2.) DURING the course of assessment, the AO noticed that the assessee has claimed the short -term capital loss on account of share transaction. He rejected that claim. According to him, in the absence of the balance -sheets of the companies for para 11 has stated that the mere fact of non -filing of the balance -sheets of the companies, the shares of which were sold cannot be made a ground for rejection of the short -term capital loss and the order of the AO was set aside and sent back with direction to AO that the appellant should be given reasonable opportunity to produce necessary evidence, such as broker's notes, quotations in the stock exchange and balance -sheets of the companies concerned. In compliance with the direction of the CIT(A), the AO instead of considering the materials produced, he disallowed the claim of short -term capital loss invoking the Explanation to s. 73 of the Act. In appeal before the CIT(A) in second round, the CIT(A) vide his assessee in the asst. yr. 1980 -81. In appeal before the Tribunal, the Tribunal has also confirmed the view taken by the
(3.) HEARD learned counsel for the parties. Mr. Mullick, learned counsel for the Revenue, submits that, in spite of the direction, the balance -sheets of the companies are not produced by the assessee before the AO in the second round. Similarly, the broker's note was also not produced. Therefore, when the directions were not complied with, in the second round, the CIT(A) as well as the Tribunal should not allow the claim of short -term capital loss in share transactions.;