- (1.) In this Reference under Section 66(1) of the Income tax Act, 1922, the Commissioner of Income-tax is the Applicant. The facts are briefly as follows:
(2.) The Assessee is a partner of firm Messrs. Mugneeram Bangur and Company who are the reputed dealers in shares. During the accounting year relevant for the assessment year the Assessee sold the following shares: (i) 750 shares of Lansdowne Jute Mills at Rs. 210 (Rupees two hundred and ten) per share on January 16, 1951, for Rs. 1,57,500 (Rupees one lakh fifty seven thousand and five hundred). (ii) 550 shares of Bangur Brothers at Rs. 109 (Rupees one hundred and nine) per share on January 16, 1951, for Rs. 59.950 (Rupees fifty nine thousand and nine hundred and fifty). (iii) 171 shares of Hoolungooree Tea Co. at Rs. 373 (Rupees three hundred and seventy three) per share on January 24, 1951, for Rs. 63,783 (Rupees sixty three thousand and seven hundred and eighty three.
(3.) The sales yielded a surplus of Rs. 80,823 (Rupees eighty thousand and eight hundred and twenty three. The Income tax Officer treated this surplus as profit in share dealing business. In appeal the Appellate Assistant Commissioner held that the profit of Rs. 48,000 (Rupees forty eight thousand) arising from sale of Lansdowne Jute Mills shares was assessable as business income and that the balance of Rs. 32,823 (Rupees thirty two thousand and eight hundred and twentythree)(profit of Rs. 4,950 and Rs. 27,873 arising from sales of Bangur Brothers shares and Hoolungooree Tea Co. shares respectively) was exempted as capital receipts and therefore, excluded the latter amount from assessment.;