Share-trading loss deductible as business loss where shares were sold in the ordinary course without any controlling-interest element.

A loss on sale of shares is deductible as a business loss where the shares are held and dealt in the ordinary course of a share-trading business, and not acquired to secure controlling interest or any enduring extra-commercial advantage. The Tribunal's findings that the shares were sold at market price and involved no extra-commercial element were factual findings, and the challenge to them failed because they were neither unsupported by evidence nor perverse. On those facts, the loss was allowable as a business deduction and not a capital loss.

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Issues: Whether the loss arising on the sale of shares was an admissible deduction as a business loss in the assessee's share-dealing business.

Analysis: The assessee carried on the business of buying and selling shares, and the Tribunal found that the shares were not acquired to secure or retain controlling interest in the companies or to obtain an enduring advantage. It further found that the shares were sold at market price and that no extra-commercial element was involved. The challenge to these findings failed, as they were findings of fact and were not shown to be unsupported by evidence or perverse. On those facts, the loss was incurred in the ordinary course of the share-dealing business.

Conclusion: The loss was allowable as a deduction and was not a capital loss.

Final Conclusion: The reference was answered in favour of the assessee, and the sale loss was held deductible in computing business income.

Ratio Decidendi: A loss on sale of shares is deductible as a business loss where the shares are dealt with in the ordinary course of the assessee's share-trading business and the transaction does not involve a controlling-interest or other extra-commercial element.

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