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Section 45 of the Income-tax Act, 1961 - Capital gains - Chargeable as - Assessment year 1990-91 - Assessee claimed loss on sale of rights debentures, which were offered to assessee in lieu of holding shares which were held as stock-in-trade, in its return of income - Assessing Officer disallowed assessee's claim on ground that assessee was holding old shares as stock-in-trade - On appeal, Commissioner (Appeals) concluded that cases relied upon by assessee in support of its claim were not applicable, since assessee had valued old shares at market price - Whether since, balance sheet, profit and loss account and computation tendered by assessee before Assessing Officer indicated that old shares held as stock-in-trade were valued at cost and not at market price, therefore, finding of Commissioner (Appeals) was factually wrong and Tribunal was right in allowing loss claimed by assessee - Held, yes FACTS The assessee claimed loss on the sale of rights debentures of a company 'L' in its return of income. These rights debentures were issued to the assessee as the assessee was holding shares of 'L' (old shares). These old shares were held as stock-in-trade by the assessee. The Assessing Officer disallowed the assessee's claim on the ground that the assessee was holding the old shares as stock-in-trade. On appeal, the Commissioner (Appeals) dismissing the assessee's contentions held that the cases relied on by the assessee, viz., Miss Dhun Dababhoy Kapadia v. CIT [1967] 63 ITR 651 (SC) and CIT v. K.A. Patch [1971] 81 ITR 413 (Bom.), were not applicable in instant case. However, on second appeal, the Tribunal took the view that in view of the aforestated two decisions, the assessee should succeed. Consequently, the Tribunal allowed the appeal. On appeal under section 260A : HELD The finding of the Commissioner (Appeals) that the of the Supreme Court in Miss Dhun Dadabhoy Kapadia's case (supra) and the of the Bombay High Court in K.A. Patch's case (supra) were not applicable as the assessee had valued the old shares at market price, was factually wrong. The balance sheet, the profit and loss account and the computation tendered by the assessee before the Assessing…

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