| Case ID |
39982924-0280-4068-96f3-242fb2ab32e2 |
| Body |
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| Case Number |
IT REFERENCE MISC. CASE No. 610 OF 1973 |
| Decision Date |
Apr 29, 1977 |
| Hearing Date |
|
| Decision |
The case revolves around the sale of shares by a Hindu Undivided Family (HUF) and whether the loss incurred should be classified as a capital loss or a business loss. The Tribunal found that the shares were not held as stock-in-trade and that the transaction was not in the nature of trade. The court concluded that the loss of Rs. 3,90,750 arising from the sales of shares was indeed of capital nature. The decision favored the revenue, upholding the Tribunal's findings and emphasizing the burden of proof on the assessee to establish the nature of the transaction as a trade. |
| Summary |
In this significant case decided by the Allahabad High Court, the key issue was whether the loss from the sale of shares by a Hindu Undivided Family (HUF) should be treated as a capital loss or a business loss under the Income-tax Act, 1961. The court examined the nature of the transaction, noting that the shares had been held since 1952 and were sold in a solitary transaction. The court found that the presumption is that such a transaction does not constitute trade, and the burden of proving otherwise lies with the party asserting it. The Tribunal had previously ruled that the shares were not held as stock-in-trade, a finding that the court upheld. This case is pivotal for tax law practitioners as it clarifies the distinction between capital losses and losses incurred in the course of trade, emphasizing the need for clear evidence to support claims of trading activity. Keywords such as 'Income-tax Act', 'capital loss', 'business loss', and 'Hindu Undivided Family' are crucial for understanding the implications of this case in tax law. |
| Court |
Allahabad High Court
|
| Entities Involved |
Not available
|
| Judges |
D.M. Chandrashekhar,
R.M. Sahai
|
| Lawyers |
V.K. Khanna for the Applicant,
Deokinandan and Ashok Gupta for the Respondent
|
| Petitioners |
Seth Banarsi Das Gupta
|
| Respondents |
Income Tax Officer
|
| Citations |
1977 SLD 1193 = (1977) 108 ITR 377
|
| Other Citations |
Investment Ltd. v. CIT [1970] 77 ITR 533 (SC),
Raj Kishen Prem Chandra Jain v. CIT [1959] 35 ITR 590(Punj.),
Seth Banarsi Das Gupta v. CIT [1971] 81 ITR 170 (All.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
28(1)
|