Trading loss from share dealings turns on factual findings and stands when based on relevant evidence.

A loss from share dealings is treated as a trading loss when the evidence shows the shares were bought and sold as part of the taxpayer's business rather than for an extraneous controlling purpose. The fact-finding authorities accepted that the transactions were business operations, and that conclusion was upheld because the characterisation of a loss as trading loss is primarily a question of fact. Such a finding will not be disturbed unless relevant material is ignored or irrelevant material is relied upon.

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Issues: Whether the losses arising from the assessee's share dealings were trading losses incurred in the course of business.

Analysis: The relevant assessment years fell under the Indian Income-tax Act, 1922, and the references arose under section 66(1). The Tribunal, after examining the evidence, found that the shares were purchased and sold as part of the assessee's business and not for any extraneous controlling purpose. The High Court accepted that finding. The finding that a loss is a trading loss is primarily one of fact, and there was no case that the Tribunal ignored relevant material or relied on irrelevant considerations.

Conclusion: The losses were trading losses arising in the course of business and the finding in favour of the assessee was upheld.

Ratio Decidendi: Whether a loss is a trading loss is primarily a question of fact, and when the fact-finding authorities reach that conclusion on relevant evidence, it will not be disturbed absent disregard of relevant material or consideration of irrelevant material.

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