2003 (1) TMI 56

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....case, the Tribunal was right in allowing the loss suffered on renouncing its rights entitlement to convertible debentures of Larsen and Toubro Ltd., ignoring the fact that the assessee was in receipt of Rs. 62,997 on account of sale of rights which was credited in the profit and loss account which was business income as these rights debentures were offered to the assessee in lieu of holding shares which were held as stock-in-trade and therefore any realisation/income which arose on account of stock-in-trade was definitely by way of income?" Facts: For the assessment year 1990-91, the assessee claimed loss on the sale of rights debentures of Larsen and Toubro, amounting to Rs. 2,23,353 in its return of income. These rights debentures w....

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....red a capital loss in the old shares to the extent of Rs. 37,630, which she was entitled to set off against the capital gain of Rs. 45,262.50. This was allowed by the Supreme Court. The assessee herein contended before the Commissioner of Income-tax that the judgment of the Supreme Court in the case of Dhun Kapadia [1967] 63 ITR 651 was applicable. However, the Commissioner of income-tax (Appeals) came to the conclusion that the said judgment of the Supreme Court in Dhun Kapadia's case [1967] 63 ITR 651 was not applicable as the assessee in that case was an investor and the shares were held by way of investment and not as stock-on-trade, whereas in the present case, the shares were held as stock-in-trade and, therefore, the entire amount of....