Law:

Section:

Section 28(i) of the Income-tax Act, 1961 (Corresponding to section 10(1) of the Indian Income-tax Act, 1922 - Business loss - Allowable as - Assessment years 1956-57, 1958-59 and 1959-60 - Whether previous decision that assessee's holding constituted his stock-in-trade will not preclude a finding that for any subsequent year he held shares as capital investment but for purpose of deciding question whether assessee is a dealer in shares, Tribunal must take into account all materials facts which were before it - Held, yes - Whether where previous and subsequent orders of assessment, which were good and cogent evidence, showed that in relevant assessment years assessee was a dealer in shares and there was nothing on record to justify view that assessee who was a dealer in shares since 1942-43 became an investor during intervening years under reference, losses claimed by assessee in purchase and sale of shares had to be allowed as business loss - Held, yes FACTS The assessee had been dealing in shares since 1941 and for the assessment years 1942-43 to 1947-48 the profits made on the sale of shares were taxed as business profits till. In his hands. Since then there were no sale transactions. Till in the assessment year 1954-55, the assessee showed a loss of on the sale of shares and the High Court allowed it as a business loss. For the assessment year 1955-56 the loss incurred by the assessee was allowed by the AAC. For the assessment years 1956-57, 1958-59 and 1959-60, the assessee claimed loss on sale of shares purchased between the years 1944 to 1947, while for the assessment year 1957-58, the profit shown on sale of shares was taxed as business profit. The same was the case for the assessment year 1960-61. The ITO rejected the claim on the grounds (1) that the assessee was not carrying on any business in shares; (2) that he had purchased those shares 10 or 11 years before the date of sale; (3) that there was no continuity or repetition of sale transactions for a considerable period of time and it could not therefore be said that he was doing a regular business of purchasing and selling shares during accounting year; (4)that the investments were large and the…

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