Law:

Section:

Section 256, read with section 28(i), of the Income-tax Act, 1961 - Reference - Question of fact - Assessment year 1959-60 - Whether Tribunal's finding that a particular loss from sale of shares is a trading loss or capital loss, which is based on relevant material and totality of facts, is a finding of fact and gives rise to no question of law - Held, yes - Whether it is necessary for Tribunal to state in its specifically that it had taken into consideration the totality of circumstances or the cumulative effect of the circumstances pointed out to it - Held no Facts For the assessment year 1959-60, the assessee claimed deductions, inter alia, in respect of the loss on the sale of certain shares. The assessee's claim was disallowed by the ITO and the AAC upheld the disallowance on the ground that the holding of these shares could be reasonably attributed to the investment portfolio and, hence, the said loss was a capital loss and not a business loss or a revenue loss. The Tribunal relied upon the fact that in the earlier years, the profits made by the assessee on the sale of shares had been treated as business income and that would show that the assessee in the earlier years had been regarded as a dealer in shares. The Tribunal also pointed out that nothing was shown on the record which would suggest that the acquisition and purchase of these shares was for anything other than normal commercial purposes or that the sales were not made in the ordinary course of business. The Tribunal held that the mere fact that the shares had been sold to a company belonging to the same group and under the same control would not be conclusive to show that the transactions were bogus or not in the normal course of business or were for an extra commercial consideration. It was pointed out to the Tribunal by the revenue concerned that these shares were shown by the assessee as investments in the balance sheet. The Tribunal held that that circumstance would not necessarily lead to a conclusion that the shares were held in the investment portfolio and not as stock-in-trade. The Tribunal, thus, allowed the assessee's claim. The assessee's application for reference under section…

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