COMMISSIONER OF INCOME TAX Vs. RAM KUMAR AGGARWAL

JUDGEMENT

(1.) This appeal arises from the judgment of a division bench of the Calcutta High court answering the questions referred to it in favour of the assessee and against the Revenue. The assessment year concerned herein is 1956-57. The three questions referred at the instance of Revenue, for the opinion of the High court are:

(2.) The assessee is a partnership firm. The accounting year relevant to A. Y. 1956-57 was the year ending on 31/12/1955. The Income Tax Officer made an assessment on a total income of Rs. 36,41,544. 00 which included a sum of Rs. 32,25,550. 00 representing the surplus which the assessee received during the previous year from the liquidator of Chrestian Mica Co. Ltd. which went into voluntary liquidation in the year 1955. The assessee preferred an appeal to the Appellate Assistant Commissioner objecting to the inclusion of the said surplus amount. The appeal was dismissed. But on further appeal, the Income Tax Appellate tribunal agreed with its contention.

(3.) The assessee was a regular dealer in shares. In the year 1945, it purchased all the equity shares of Chrestian Mica Co. Ltd. which was then a public limited company. The assessee took over its management. In 1947, the company was converted into a private limited company. For the A. Y. 1949-50, the assessee claimed a trading loss of Rs. 20,88,735. 00 stated to be theloss suffered on account of depreciation of the value of the shares of the said company. This claim was made on the basis that all the shares of the company were held by it as stock-in-trade. Its claim was allowed by the tribunal on appeal. In all the subsequent assessments, the said shares were treated as its stock-in-trade and value of those shares as claimed by the assessee was adopted.