| 17/5/2012 |
HOME
FSS
Downloads
|
| Board of Special Commissioners - Cases |
| Case no. 28b/55 |
Decided: 8 November, 1956 |
   |
|
Assessment of profits realised on the sale of securities - article 5(1)(e), now 4(1)(c), Income Tax Act
|
Taxpayer was a dealer in securities. He had purchased a number of securities before 1st January, 1948. When these were subsequently sold, the Commissioner assessed the profit made between the selling price and the original (pre-1948) price.
Appellant claimed that (a) that part of the profit attributable to the pre-Income Tax era was not to be subjected to tax; and (b) India 3% Bearer was not to be taken into consideration in the assessment as these had been temporarily withdrawn by the Indian government.
The Commissioner quoted an English authoritative text and maintained that in the case of a dealer in securities the profit which had to be taken into account was that which was realised and not that which was merely estimated or anticipated.
The Board agreed but held that since, unless otherwise specifically provided, the law is not retroactive, income in respect of pre-1948 years was not to be taxed. Tax was to be imposed on the difference between the selling price and the quoted price as on 31st December, 1947 and not on the difference between the selling price and the original price. The authority quoted by the Commissioner could not be applied to the present case, since such exceptional circumstances could arise only where a new law had just come into force. The principle was to be also inversely applied in cases where the quoted value on 31st December, 1947 was lower than the original cost.
The third (and final) decision was on a point of fact only and, therefore, is not being published.
|
|
|
|
|