Capital loss on shares held genuine where transaction was not a tax device and no question of law arose.

The Tribunal treated the capital loss claim as bona fide because the debtor company was virtually insolvent, the assessee accepted shares only to salvage remaining value, and the later sale at a loss was not a sham device to evade tax. The reasoning also noted that the debt could have been written off as a bad debt and claimed as business loss, supporting the genuineness of the transaction. On that material, the High Court found the Tribunal's view well reasoned and free from infirmity, and held that no question of law arose. The disallowance of the capital loss was therefore not interfered with, and the assessee succeeded.

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Issues: Whether any question of law arose from the Tribunal's order disallowing the capital loss claimed by the assessee, and whether the transaction resulting in the loss was a mere device to avoid tax.

Analysis: The Tribunal found that the debtor company was virtually insolvent, that the assessee took shares in satisfaction of the amounts due only in an attempt to salvage whatever value remained, and that the subsequent sale of those shares at a loss was not a sham arrangement. The reasoning also noted that the amount due could have been written off as a bad debt and claimed as business loss, reinforcing the bona fides of the assessee's conduct. On the material before it, the Tribunal's view was held to be well reasoned and free from infirmity.

Conclusion: No question of law arose, and the disallowance of the capital loss was not interfered with. The decision was in favour of the assessee.

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