Sabyasachi Mukharji, J.
1. This reference arises out of the assessment for the assessment year 1959-60 for which the corresponding accounting year is the year ending 30th June, 1958. The assessee is a public limited company deriving income from property, dividends from shares and interest on loans. For the assessment year 1959-60, the assessee claimed deduction of a sum of Rs. 14,800 as business loss arising out of sale of 1,500 shares of Elphinstone Spinnig & Weaving Mills Ltd. The Income-tax Officer disallowed this claim holding that the assessee was an investor in shares and not a dealer in shares.
2. There was an appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner found that 1,500 shares in Elphin-stone Spinning and Weaving Mills Ltd. were purchased and sold by the assessee in one lot. Inasmuch as in the appeal for the immediately preceding year the Appellate Assistant Commissioner had considered the question whether the assessee was a dealer in shares or not and had come to the conclusion that the assessee was not a dealer in shares, he held that in the yearunder appeal also the assessee was not a dealer in shares. He, accordingly, upheld the order of the Income-tax Officer.
3. On further appeal before the Income-tax Appellate Tribunal it was contended that the assessee had purchased these shares only in 1956-57 and out of this a big lot was sold during the year of account as the assessee's expectation about a rise in value of the shares had not been fulfilled. The assessee contended that these shares constituted a part of the assessee's trading stock, and this, according to the assessee, was proved by the short intervals at which the lot was disposed of. The Tribunal for the reasons mentioned in-.its order and in view of its decision in appeal in respect of the preceding year held that the loss on the sale of these shares was not a revenue loss from business. It, therefore, upheld the disallowance of the claim.
4. An application made under Section 66(1) of the Indian Income-tax Act, 1922, was refused by the Tribunal. An order being made by this court under Section 66(2) of the Indian Income-tax Act, 1922, the following question has been referred to this court :
'Whether, on the facts and in the circumstances of the case, the amount of Rs. 14,800 being the loss in the sale of shares of Elphinstone Spinning and Weaving Mills Ltd did not constitute a trading loss for the assessment year 1959-60 and as such was correctly disallowed by the Tribunal ?'
5. It was contended before the Tribunal that 3,500 shares of Elphinstone Spinning and Weaving Mills Ltd. were purchased only in the year 1956-57 and out of this 3,500 shares, a big lot being 1,500 was sold during the year of account. It was argued that the sale took place because the company's expectation about a rise in value of the shares had not been fulfilled. The Tribunal referred to its previous order in respect of the preceding year. It was contended in the appeal for the preceding year that the company was authorised by its memorandum of association to buy and sell stocks and shares. The Tribunal, however, found that the appellant's main business was in jute and they had not traded in shares any time before the accounting year corresponding to the assessment year 1958-59. In the balance-sheet the assessee-company had described the shares as investments and during the year of account itself the loss was described as loss in investments. The Tribunal also took into consideration the fact that bulk purchase was made, also the fact that a big lot from this bulk purchase was sold in one year. There was no evidence before the Tribunal of any organised activity or any regular course of events relating to the shares. The Tribunal considered that when the intention of the assessee was an important aspect to be considered, the manner in which the assessee had described the transaction is a relevant and important factor. In view of the manner in which the transactions have been described, in view of thefrequency of the purchase and the sale and in the absence of any evidence of any organised aetivity or regular course of events relating to the shares, and in view of. the fact that the assessee's general business was in jute, the Tribunal came to the conclusion that these shares were held as investments. The Tribunal has duly taken into consideration the fact that the memorandum of association authorised the purchase and sale of shares and also was aware of the fact that the description by itself was not conclusive of the nature of the transaction.
6. Whether a particular loss is a loss in share dealing or in investment is a mixed question of law and fact and if the Tribunal, bearing the correct principles in mind, comes to a conclusion after considering all the relevant factors, this court in a reference under Section 66 of the Indian Income-tax Act will not interfere with such a finding. In that view of the matter we find that, in the facts and circumstances of the case, the Tribunal has correctly borne the principles in mind and has considered all the relevant facts pro and contra in respect of the rival contentions of the parties and has come to the conclusion that the loss was capital loss. In the premises, we are of the opinion that we cannot interfere with such a finding in the facts and circumstances of this case.
7. As such the question referred to this court is answered in the affirmative, and in favour of the revenue. The assessee will pay to the Commissioner his costs of this reference.
Shankar Prasad Mitra, J.
8. I agree.