SETH R DALMIA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The following four questions have been referred to this Court under Section 66(1) of the Income-tax Act, 1922. on the application of the assessee and the Revenue by the Income-tax Appellate Tribunal:-

(2.) The assessee. Shri Ram Krishan Dalmia, is an individual. The matter relates to the assessment year 1953-54, the relevant previous year for which ended on September 30, 1952. In 1944-45, the joint family of the assessee sold the shares in question alongwith various other shares to Bharat Bank Limited. On February 5, 1948, the Managing Director of the Bharat Bank Limited addressed the following letter to the assessee:

(3.) The assessee did not take delivery of the shares on March 31, 1948, as provided in clause 3 of the letter, nor on March 31, 1951, as provided in clause 4 thereof. He also did not enter these shares as purchases in his investment account or share account. He did not further credit the price thereof to the bank's account till March 31, 1951 in his books. For not taking delivery of 7500 preference shares of Dalmia Investment Company Limited, the assessee paid Rs. l,05,000.00 as damages. He took delivery of the remaining shares on payment of Rs. 75,000.00 in cash and by transferring some shares held by him for balance of the amount. The final date of March 31, 1951. fixed for taking delivery of the shares under clause 4 was by mutual consent subsequently changed to March 31, 1953. The delivery of the shares of Lahore Electric Supply Company and of D.C.&P.M. Company Limited was effected to the assessee during the period from February 18, 1952, to September 4, 1952. The Bharat Bank Limited claimed the following amounts by way of interest from the assessee as per agreement dated February 5, 1948 :- <IMG>JUDGEMENT_30_ILR(DEL)1_1971Image1.jpg</IMG>