COMMISSIONER OF INCOME TAX Vs. PRAVEEN ELECTRONICS LTD

JUDGEMENT

(1.) THIS is an appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') preferred by the Revenue against the judgment dated 28th February, 2005 passed by the Income Tax Appellate Tribunal (hereinafter referred to in short as 'Tribunal') in ITA No. 3273/ Del/2000, in respect of, assessment year 1996 -97.

(2.) AFTER hearing learned Counsel for the Revenue, as well as, the assessee we are of the view that the findings recorded by the authorities below are pure findings of fact. There are no questions of law which arise for our consideration much less, substantial questions of law. The reasons for arriving at this conclusion are indicated by us hereinbelow. Before we proceed, it must be recorded that in the course of his submissions the learned Counsel for the Revenue, Mr. R.D. Jolly fairly conceded that the first question of law as proposed in the appeal did not arise in the facts and circumstances of the present case. Therefore, we are left with only question Nos. (ii) and (iii) as proposed in the appeal.

(3.) COMING back to the facts, the assessee, in his return had declared income by way of interest to the extent of Rs 38,02,385/ -. Against the said income it had claimed expenditure by way of administrative expenses, in the sum of Rs 2,475/ -, as also, interest charges amounting to Rs 5,62,200/ -. What attracted the attention of the Assessing Officer was the loss claimed by the assessee in share transactions which resulted in a loss return. The Assessing Officer noticed that the assessee had purchased shares worth Rs 94,46,601/ - which were sold for a total consideration of Rs 61,15,206/ -; and consequently, the assessee had claimed a loss of Rs 33,31,395/ -. The Assessing Officer disallowed this loss. A close scrutiny by the Assessing Officer revealed that: the loss to the assessee with respect to share transactions, had resulted from trading in shares of four companies referred to hereinafter; and also, that, all the share transactions in issue, had been handled by a share broker by the name of M/s Sushil Kumar Jindal and Co., Darya Ganj, New Delhi (hereinafter referred in short as 'broker'). The companies whose shares were traded by the assessee are as follows: