COMMISSIONER OF INCOME TAX Vs. PATCH K A

JUDGEMENT

(1.) THIS is a reference under s. 66(1) of the Indian IT Act, 1922.

(2.) THE relevant assessment year is 1960-61, the accounting year being the year ended 31st March, 1960. THE assessee is an individual. THE assessee was carrying on business as a share-broker. He also dealt in shares on his own account and in those dealings he used to regularly buy shares of joint stock companies. THE shares so purchased by him as a dealer were his stock-in-trade. In the beginning of the relevant accounting year he held, amongst others, 1,750 ordinary shares of the Tata Iron and Steel Co. Ltd., which he had purchased before the beginning of the accounting year. THEy were therefore held by him as his stock-in-trade. THE assessee's practice from year to year is to show the shares held by him as his stock-in-trade at the actual cost. In other words, he does not value the holding of his stock-in-trade at the end of each year at the market price, but continues to carry forward his holding from year to year at its original cost.

(3.) THE questions of law referred are :