Judgment

SHAH, J. : The High Court of Judicature at Bombay answered the following two questions referred by the Income-tax Appellate Tribunal, Bench "B", Bombay, under S. 66(1) of the Indian Income-tax Act, 1922 :

1. Whether the acquisition of the managing agency of the Dawn Mills Co., Ltd., was in the nature of a "business" carried on by the assessee company ?

2. If the answer to the first question is in the affirmative, whether the loss suffered by the assessee company of Rs. 1,78,438/- on purchase and sale of 400 shares of the Dawn Mill Co., Ltd., being incidental to its business of acquiring the managing agency, was a loss of a revenue nature ?, as follows :

1. Acquisition of the managing agency was an acquisition of a capital asset;

2. The loss in respect of the 400 shares was of a capital nature. Against the order of the High Court, this appeal is preferred with special leave.

2. The appellants are a private limited company registered under the Indian Companies Act, 1913, and carry on business as brokers, managing agents and dealers in shares and securities. One of the objects for which the appellants were incorporated was to acquire managing agencies. The appellants also carried o