1994 (4) TMI 107

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....rn on17th June, 1987disclosing a loss of Rs. 1,23,025. The return was accompanied by audited balance sheet and profit and loss account. The Assessing Officer framed the assessment under s. 143(3) on30th Dec., 1987computing the business loss at Rs. 1,20,006. The learned CIT on a perusal of case record of the assessee noted that the assessee held 22,092 shares of M/s TICIL of the face value of Rs. 10/- each or Rs. 2,20,920. He noted that by virtue of amalgamation of TICIL with M/s Karam Chand Thaper & Bros. (Co.) Ltd. by virtue of an order dt.12th Dec., 1984of the Hon'ble Calcutta High Court, the assessee in turn was issued 147 shares of M/s Karam Chand Thapar & Bros. of the value of Rs. 100 each or Rs. 14,700. The assessee claimed the differ....

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....ler in shares, in asmuch as, there has been neither any sale nor purchase of any shares in a number of years while there was a petty loss of Rs. 7 in one year and a nominal profit of Rs. 775 in another year and again there was a loss of Rs. 18,000 in one year and a profit of Rs. 11,259 in an another. He also noted that even if the shares stood disclosed as stock-in-trade, it has more characteristic of capital asset held as investment. The learned CIT thus directed the Assessing Officer to disallow the business loss of Rs. 2,06,220 and treat the same as long-term capital loss. 3. Shri O.P. Sapra, the learned authorised representative for the assessee submitted that the learned CIT was not justified in taking recourse to his revisionary po....

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....s. 263. The learned authorised representative places reliance on the judgment of the Hon'ble Allahabad High Court in the case of CIT vs. Goel Family Specific Trust (1988) 67 CTR (All) 206 : (1988) 171 ITR 698 (All). He also refers to judgments reported as 116 ITR 129 (sic) and K.N. Agarwal vs. CIT (1991) 100 CTR (All) 170 : (1991) 189 ITR 769(All). 4. The learned Departmental Representative supported the orders of the learned CIT. 5. We have heard both the parties and have also perused the relevant record. We are of the view that the learned CIT was not justified in invoking his revisionary powers under s. 263 in holding that the assessee was not a dealer in shares when the record of the assessee as also the treatment given by the Rev....