Capital loss on shares acquired to eliminate competition was not deductible as business loss.

Shares acquired to eliminate competition and secure a lasting business advantage were treated as an investment made to obtain an enduring capital advantage, not as trading stock. Because the assessee was not shown to be a dealer in shares and the transaction was connected with acquisition of a capital asset rather than day-to-day business operations, the loss on sale retained that capital character. The resulting loss was therefore capital in nature and not allowable as a business loss.

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Issues: Whether the loss arising from the sale of shares acquired to eliminate competition and secure business advantage was a capital loss or a revenue loss.

Analysis: The shares were acquired not as trading stock but as an investment intended to secure a lasting business advantage by eliminating competition on the relevant routes. The acquisition was treated as a means of obtaining a capital asset or enduring source of income, and the loss on its realisation followed the character of that investment. The assessee was not shown to be a dealer in shares, and the transaction was held to be connected with the acquisition of a capital advantage rather than the carrying on of day-to-day business operations.

Conclusion: The loss was held to be of a capital nature and not allowable as a business loss.

Ratio Decidendi: Where shares are acquired to secure an enduring business advantage by removing competition, the resulting loss on their sale is a capital loss.

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