COMMISSIONER OF INCOME-TAX, WEST BENGAL vs BENGAL ASSAM INVESTORS — 1971 PTD 1042

Citation: 1971 PTD 1042

Court: Calcutta High Court

Year: 1970

Decision Date: 1970-12-31

Parties: COMMISSIONER OF INCOME-TAX, WEST BENGAL vs BENGAL ASSAM INVESTORS JUDGMENT

Headnotes

Case cited as 1971 PTD 1042

Judgment Text

Court Name: Calcutta High Court Judge(s): K. L. Roy, Sankar Prasad Mitra Title:COMMISSIONER OF INCOME-TAX, WEST BENGAL vs BENGAL ASSAM INVESTORS JUDGMENT Reported As: 1971 PTD 1042 Result: company refused Judgment JUDGMENT SANKAR PRASAD MITRA, J.-----This is a reference under section 66(i) of the Indian Income-tax Act, 1922. The assessm ent year is 1958-59, the corresponding accounting year ended on the 30th June 1957. On April 18, 1950, the respondent purchased 19,540 preference shares and 5,085 ordinary shares of Messrs Muir Mills Ltd. For Rs, 87,05,000.00 at an auction sale held by the Hongkong & Shanghai Banking Corporation Ltd. During the relevant accounting year the respondent sold 4,402 preference shares and 549 ordinary shares. Since section 12-B of the Indian Income-tax Act, 1922, was operative with regard to sales of capital assets after the 31st March 1956, the Income-tax Officer issued a notice requiring the assessee, that is the respondent, to furnish particular of the shares sold and the capital gains made. The assessee, in reply, claimed a loss of Rs. 1,03,994.00 which included an expenditure of Rs. 1,00,721'00 incurred by the assessee in litigation in respect of 549 ordinary shares and 4,402 preference shares sold during the year. The Income-tax Officer disallowed the litigation expenses and computed the loss at Rs. 3,275 00. The Income-tax Officer was of the vie v that the litigation expenses claimed as a deduction could not be allowed under section 12-B…

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