COMMISSIONER OF INCOME TAX NAGPUR Vs. SUTLEJ COTTON MILLS SUPPLY AGENCY LIMITED

JUDGEMENT

(1.) THIS is an appeal from the judgment of the High Court of Madhya Pradesh in a reference made at the instance of the assessee M/s. Sutlej Cotton Mills Supply Agency Ltd. (hereinafter referred to as the 'assessee') by the Income Tax Appellate Tribunal (here- inafter referred to as the "Tribunal') under Section 66 (1) of the Indian Income Tax Act. The question referred was:

(2.) WHEN the reference came up for hearing before the High Court, the High Court found that although the Tribunal was of the view that the question referred was a mixed question of law and fact it had not stated all the facts and circumstances on which it based its conclusion that the profit of Rs. 2,13,150.00 was a business profit and so the Court called for a supplementary statement of the case and a supplementary statement of the case was submitted to the Court by the Tribunal.

(3.) FOR the assessment year 1956-57 (accounting year ending on 31-3-1956), the Income Tax Officer sought to assess the amount on the basis that it was profit accruing to the assessee from an adventure in the nature of business. The assessee contended that the amount represented capital gain as the shares were purchased by way of investment and that the same cannot be taxed as revenue receipt. The Income Tax Officer rejected the contention. The assessee filed an appeal before the Appellate Assistant Commissioner. He confirmed the order. The assessee then went up in appeal before the Appellate Tribunal.