Law: Income Tax Act, 1922

Section: 24

Income tax Act (XI of 1922)--S.24 Setting off of loss in computing income Losses suffered on redemption of Government loans Investments in securities whether stock in trade Onus on assessee to prove Assessee a banking company holding securities and showing trading profits therein Assessee also effecting purchase and sale of securities and showing trading profits therein ¬Assessee claiming loss of redemption of securities which Department disallowed holding that investment in those securities did not represent assessee's stock in trade and as such it was not capital loss Held, assessee had securities as an investor and it did not form its stock in-¬trade Assessee, as a bank, purchased and sold Government securities ¬Assessee failed to establish that securities in question were treated by it as part of stock in trade which was a matter within knowledge of assessee who could produce evidence from its record as to whether it had maintained any distinction between those securities which were its stock in trade and which were held by way of investment Onus of proving that loss arose from securities held by assessee as stocks in-trade, lay on assessee which it failed to discharge. Punjab Cooperative Bank Limited v. C.I.T., Punjab (1940) 101 T R 635 ref. Malabar Cooperative Central Bank Limited v. Commissioner of Income tax, Kerala 1975 (101) I T R 82 distinguished. JUDGMENT HAIDER ALI PIRZADA, J. This is a direct reference under section 66 (1) of the Income tax Act, 1922, the following question law propounded by the assessee to have arisen out of the order, dated 5 1 1973 of the Income tax Appellate Tribunal in the matter of assessment of Messers Grindlays Bank Limited (hereinafter called the assessee) for the year 1957 58: "Whether in the facts and circumstances of the case and having regard to the fact that the applicant Company is admittedly carrying on banking business was the Tribunal right in holding that the losses suffered on redemption of Government loans was a capital loss and not deductible from the profits?" The assessee is a banking company incorporated in the United Kingdom with its registered office at London. It carries on banking business in Pakistan,…

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