| Case ID |
2bf0ce9e-5cb9-4347-b84f-98e6990fa69c |
| Body |
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| Case Number |
IT REFERENCE No. 30 OF 1963 |
| Decision Date |
Jan 19, 1971 |
| Hearing Date |
Jan 18, 1971 |
| Decision |
The Bombay High Court held that the assessee was a dealer in shares during the assessment year 1954-55. The court found that the shares sold by the assessee were purchased when he was recognized as a dealer in shares, and thus, the loss incurred on their sale should be treated as a business loss. The court ruled that the previous inactivity of the assessee did not equate to a cessation of business and emphasized that the intention to continue business was present. The court rejected the previous Tribunal's conclusion, affirming that the assessments in prior and subsequent years supported the claim of the assessee as a dealer in shares. The decision was favorable to the assessee, allowing the deduction of the claimed business loss. |
| Summary |
This case discusses the treatment of business losses within the framework of the Income-tax Act, 1961. The primary issue was whether the assessee, Karsondas Ranchhoddass, was engaged in a legitimate trading business in shares, allowing him to claim a loss as a business expense. The Bombay High Court emphasized the importance of considering the continuity of business activities, even in cases of inactivity. The court ruled that the previous assessments, where the assessee was recognized as a dealer in shares, were significant evidence supporting the claim. The ruling reinforces the principle that long intervals of inactivity do not necessarily terminate a business relationship, provided there is evidence of intent to resume operations. This case underscores the complexities involved in categorizing losses in income tax law, and the necessity for courts to consider the totality of the circumstances surrounding an assessee's business operations. Keywords include income tax, business loss, share trading, legal precedent, and tax assessments. |
| Court |
Bombay High Court
|
| Entities Involved |
Not available
|
| Judges |
KOTVAL, C.J.,
CHANDRACHUD, J.
|
| Lawyers |
R.J. Kolah,
F.N. Kaka,
R.N. Hajarnavis,
R.J. Joshi
|
| Petitioners |
Karsondas Ranchhoddass
|
| Respondents |
Commissioner of Income tax
|
| Citations |
1972 SLD 450,
(1972) 83 ITR 1
|
| Other Citations |
Dwarkadas Kesardeo Morarka v. CIT [1962] 44 ITR 529 (SC),
Investment Ltd. v. CIT [1970] 77 ITR 533 (SC),
V.S.R.M. Firm v. CIT [1963] 47 ITR 720 (Mad.),
Raja Bahadur Visheshwara Singh v. CIT [1961] 41 ITR 685 (SC),
Inderchand Hari Ram v. CIT [1953] 23 ITR 437 (All.),
Mrs. Sarojini Rajah v. CIT [1969] 71 ITR 504 (Mad.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
28(i)
|