TaxTMI 
TaxTMI 
1967 (4) TMI 13
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....of the case, the surplus derived by the assessee in the sale of its shares and securities in the relevant previous years was a revenue receipt and as such taxable under the Income tax Act ?" We are unable to answer this question without calling for a supplementary statement of the case. The relevant facts and circumstances which are mentioned in the statement of the case are as follows : The assessee " was incorporated on 3rd April, 1947, and the principal activity was investment of its capital in shares and stocks. It changed its investments by sale of its shares and stocks from time to time. The income of the company was derived from dividends on shares and interest received by it on the investments. In the years prior to the assess....
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....xplained that in the previous years, relevant to the assessment year 1953-54, the control of McLeod & Co. Ltd. went out of the hands of the directors of the company. It was stated that certain persons, who wanted to acquire the majority of the shares in M/s. McLeod & Co., approached the applicant-company and offered prices which were much higher than that quoted in the market at the time. In these circumstances, the assessee-company sold the shares of McLeod & Co. Ltd. resulting in a profit of Rs. 6,66,190." Further in the same paragraph it is stated : " The Tribunal found that this particular assessee was a company of which the activities consisted of investment of its capital in stocks and shares and earning an income therefro....
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....t purchased shares and also sold some shares presumably for the purpose of making a change in investment in years prior to the assessment years under our consideration. " Then the order sets out the various sales and purchases during the relevant assessment years and the contentions of the assessee. Here again it is not stated whether the Tribunal accepts the assessee's contention that the sale of 6,900 ordinary shares of McLeod & Co. Ltd. were on account of the relinquishment of the rights of the assessee in the said company, since the control of that company went entirely out of the hands of the assessee. The Tribunal then concluded that varying investment was a part of the usual activities of the assessee, and relying on Scottish ....
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....-trade, i.e., by carrying on the business of dealing in stocks and shares as did the assessee in Commissioner of Income-tax v. Bai Shirinbai K. Kooka." Further, the Tribunal has not stated what was the object of the assessee in buying 6,900 ordinary shares of McLeod & Co. It appears from the order of the Income-tax Officer that these shares were purchased in a number of lots from the year 1948 to 1950. It is also not stated as to what was the object in buying other securities, and why did the assessee confine its activities mostly to the shares of McLeod & Co. Ltd. and the companies managed by McLeod & Co. Ltd. We have already mentioned that the Appellate Tribunal did not definitely state whether they accepted the assessee's contenti....