West Bengal Financial Corporation and Another vs Deputy Commissioner of Income Tax

This is an appeal u/s 260A. The West Bengal State Financial Corporation formed under the State Financial Corporations Act, 1951, had invested in shares of various companies and the investments aggregated to Rs. 14,05,785.

In the order of the Tribunal the names of the four companies are given.

In the assessment year 1992-93, the assessee-corporation wrote off the above sum as a bad investment and stated that "there is no possibility of getting any amount against the investment in the shares of the company".

We find from the impugned order of the Tribunal dated July 31, 2001, that the argument on behalf of the assessee was to have these shares written off like writing off bad debts.

The Tribunal turned down the said argument stating that these investments by the financial corporation were not loans and the Tribunal further mentioned that the Corporation never treated the shares as stock-in-trade.

The Tribunal also remarked that if the shares are sold at a lesser value than the acquiring value, as and when that might be done, the assessee might be eligible to claim loss arising out of such sale.

However, the shares being still held by the corporation, the claims for writing off were turned down by the Tribunal.

Once one accepts the findings on fact of the Tribunal that the shares were not treated as stock-in-trade by the corporation but as investments in the said companies, the argument of writing off made by the assessee cannot be sustained on any point of law, nor on any particular section of the Income Tax Act.

We are of the opinion no point of law arises in this case. The appeal petition is rejected.

All parties and all others concerned to act on a signed xerox copy of this dictated order on the usual undertaking.