AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
1954 (10) TMI 8
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....w said by the appellant to arise out of the order of the Tribunal. The appellant is a Hindu undivided family, comprised of Dhirajlal and his two brothers Hiralal and Kirtilal, Dhirajlal being the karta of the family. Girdharlal Trikamlal who was the father of Dhirajlal, Hiralal and Kirtilal, was the head of the joint Hindu family before his death on 26th July, 1945. During his lifetime he and one of his sons Dhirajlal were also carrying on business separately in their firm name Girdharlal Trikamlal & Co., as dealers in stocks and shares. This firm was dissolved on the death of Girdharlal and a new firm comprised of Dhirajlal and his younger brother Hiralal was formed with the object of taking over the business formerly carried on by Messr....
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....s and purchased shares worth Rs. 3,00,460 during the account years 1942-43 and 1943-44. What the assessee got from their father Mr. Girdharlal Trikamlal was converted by them into trading capital or, in other word they had converted their inheritance into the stock-in-trade. The fact that they had been purchasing other shares appears to point to this conclusion only. In these circumstances I include the profit of Rs. 1,42,025 in the assessment. " The appellant combated this position before the Appellate Assistant Commissioner and contended that the family was not doing any business in stocks and shares. On the other hand. it was only unloading the shares which had come to it on the death of Girdharlal Trikamlal and was trying to convert t....
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....hy the shares should have been transferred to the Hindu undivided family. It has also not been pointed out why the Hindu undivided family found it necessary to effect sales of a large number of shares in the financial years 1943-44 and 1944-45. It has also not been shown why the Hindu undivided family should have purchased shares of the value of over Rs. 2 lakhs between 1st August, 1942, and 1st March, 1943. We have examined the frequencies of the sales in the financial year 1943-44. Shares were sold in July, August, October, December, January, February and March. The irresistible inference appears to be that from the very start the intention of Dhirajlal both as a transferor and as a transferee was to deal in these shares. " The appellan....
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....not the Hindu undivided family was doing business in shares transferred to it by the firm is undoubtedly a question of fact but if the court of fact, whose decision on a question of fact is final, arrives at this decision by considering material which is irrelevant to the enquiry, or by considering material which is partly relevant and partly irrelevant, or bases its decision partly on conjectures, surmises and suspicions, and partly on evidence, then in such a situation clearly an issue of law arises. It is apparent from the following quotation from the judgment of the Tribunal that not only was its approach to the question raised before it tainted with suspicion, but it took into consideration a number of circumstances based purely on con....
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....divided family would also be Dhirajlal. He in his capacity as the transferor and in his capacity as the transferee was fully aware of the conditions obtaining in the share market. Prices were rising and were likely to rise on account of war. " The learned Attorney-General frankly conceded that it could not be denied that to a certain extent the Tribunal had drawn upon its own imagination and had made use of a number of surmises and conjectures in reaching its result. He, however, contended that eliminating the irrelevant material employed by the Tribunal in arriving at its conclusion, there was sufficient material on which the finding of fact could be supported. In our opinion, this contention is not well founded. It is well established t....