COMMISSIONER OF INCOME TAX Vs. BAGLA BROTHERS

JUDGEMENT

(1.) THE question for consideration in this income-tax reference is whether certain shares purchased by an assessee were its stock-in-trade or by way of investment. M/s. Bagla Brothers are the assessee. THE assessment years are 1951-52 and 1952-53.

(2.) THE assessee is a partnership firm dealing in shares, and consists of two partners, Rameshwar Prasad Bagla and Satyanarain Bagla. THEse two persons and Satyanarain's father, Hari Shanker Bagla, constitute another partnership firm, " M/s. Gangadhar Baijnath ". THE assessee held 108 shares of Maheshwari Devi Jute Mills Co. Ltd. (hereafter referred to as "jute mills"), at the commencement of the accounting period corresponding to the assessment year 1951-52. During the course of the accounting period the assessee purchased a number of shares of the jute mills at different rates. THE shares were valued at Rs. 100 per share at the close of the accounting period. THE assessee claimed a loss of Rs. 4,38,291, representing the difference between the purchase price of the shares and valuation at the close of the year.

(3.) THE assessee, however, succeeded before the Appellate Tribunal, Allahabad. THE Tribunal held that the shares purchased by the assessee relating to the jute mills and Muir Mills Co. Ltd. were both stock-in-trade.