INDRA CO LTD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This is an application under Article 226 of the Constitution for the issue of appropriate writs for, inter alia, quashing a notice dated the 19th April, 1967, purported to be under Section 154 of the Income-tax Act, 1961, proposing to rectify the petitioner's assessment for 1959-60 and all proceedings in respect thereof and for prohibiting the respondents from taking any steps or giving any effect to the said notice and for other incidental reliefs.

(2.) The petitioner is an Indian company. In its return for the assessment year 1959-60, it claimed a loss of Rs. 2,41,472 in respect of its share-dealing business. The shares on the sale of which the loss was claimed included 1,393 bonus shares of Hastings Mills Ltd. which the assessee had valued in its books at the face value of Rs. 100 each. In the assessment order for the said year the Income-tax Officer, being the respondent No. 1 herein held that the alleged sale of shares was the result of a concerted action between the sellers and the purchasers, both belonging to concerns controlled by the Bangur group and that the loss claimed did not arise in the normal course of the assessee's business and disallowed the claim for loss. It does not appear from the said order that the Income-tax Officer considered the claim for loss in respect of each particular transaction in shares.

(3.) On appeal by the petitioner against the assessment order, the Appellate Assistant Commissioner, by his order dated the 11th December 1964, allowed the entire claim for loss of Rs. 2,41,472 on the ground that the petitioner was a dealer in shares and that the Income-tax Officer had failed to establish that the loss did not arise in the normal course of its business.