Law:

Section:

Section 28(i) of the Income-tax Act, 1961 (Corresponding to section 10(i) of the Indian Income-tax Act, 1922) - Business loss - Allowable as - Assessment year 1954-55 - Assessee, individual, claimed loss in his business of purchase and sale in shares - ITO held that assessee had stopped business in share dealings seven year back and that therefore, it was not a business loss - Tribunal upheld ITO's order by merely having regard to fact that assessee ceased to do business in preceding six years and did not take into account facts pertaining to years subsequent to accounting year when he was found to carry on same business - Whether there were two periods of activity before and after interregnum or period of inactivity, and it was almost conclusive thatduring period of inactivity, assessee had not given up his intention to do further business - Held, yes - Whether when assessee had been held to be dealer in shares by successive orders of authorities themselves till 1947-48 and till then those shares were, therefore, his stock-in-trade, it would be for department to establish that shares had changed its nature and character - Held, yes - Whether since those shares were his stock-in-trade at end of assessment year 1947-48 and also in at least two years after said accounting year, they were his stock-in-trade in assessment year in question also and, therefore, loss on sale of those shares had to allowed as business loss - Held, yes FACTS The assessee, an individual, was a partner in number of firms and had also income from certain shares by way of dividends. For the assessment year 1954-55, the assessee claimed loss arising from share dealing on the ground that this being a revenue loss, should be set off against the year's profit. In view of long interval of 7 years between the purchase and sale of these shares on account of the fact that these sales represented the only dealings in shares affected during the accounting year, and also considering the fact that for the past seven years, the assessee had not indulged in even a single transaction of the sale of shares, the ITO held that there was no business in the purchase and sale of shares, and also that the loss…

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