KARSONDAS RANCHHODDAS Vs. COMMISSIONER OF INCOME TAX BOMBAY CITY II

JUDGEMENT

(1.) THE assessee, Karsondas Ranchhoddas, filed three applications before the Income-tax Appellate Tribunal asking it to refer to the High Court certain questions of law said to arise out of the consolidate order of the Tribunal in I. T. As. Nos. 7181, 7182 and 7183 of 1962-63. By its order dated the 9th of October, 1964, the Tribunal has drawn up a statement of the case and has referred the following question for the opinion of the High Court under section 66 (1) of the Income-tax Act, 1922 :

(2.) THE assessee was a partner in three registered firms at the relevant time and received income from property, dividends and business. We are concerned in this reference with the loss suffered by him on the sales of certain shares in his individual capacity. The sales were effected in Samvat year 2011, 2013 and 2114, corresponding respectively to assessment years 1956-57, 1958-59 and 1959-60. The assessee died on the 18th of July, 1964, and is represented by his son, Karsondas.

(3.) THE assessee has been dealing in shares since 1941 and for the assessment years 1942-43 to 1947-48 the profits which he made on the sale of shares where taxed as business profits in his hands. In the assessment years 1948-49 to 1953-54 there were no sale transactions. In the assessment year 1954-55, the assessee showed a loss of Rs. 44,190 on the sale of shares but that loss was disallowed by the Appellate Tribunal on the ground that for the particular year the assessee was not a dealer in shares. In a reference arising out of the judgment of the Tribunal (I. T. R. No. 30 of 1963), we have just held that the Tribunal was in error in not allowing the particular loss as a business loss. In the assessment year 1955-56, the assessee incurred a loss of Rs. 2,273 which was allowed by the Appellate Assistant Commissioner. The department did not challenge that order.