1. The question submitted to us in this reference should have really presented no difficulty but for a recent decision of the Supreme Court reported in Kikabhai Premchand v. Commr. of Income-tax, 1953 SC 509 (AIR V 40) (A), which has been very strenuously relied upon by the Advocate General as supporting his contention.

The assessee who is a woman purchased shares for investment and on 1-4-1945 she converted these shares into her stock-in-trade and carried on a business in shares. Some of these shares were sold in the assessment year 1947-43, and the question that had to be considered was how was the profit of the assessee to be ascertained with regard to the price realised by her on the sale of these shares? Was the profit to be ascertained on a difference between the price realised and the price at which she had originally bought these shares, or the difference between the price realised and the market price ruling on 1-4-1945 when these shares were converted into stock-in-trade?

2. Apart from authorities, let us try and understand the real nature of the transaction and the basis on which the profits of the assessee should be subjected to tax. The Department has assessed he