HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Bombay City I, Bombay v. Bai Shirinbai K. Kooka
Civil Appeal No. 133 of 1958
[1962] Supp. 3 SCR 391 ·
Indian Income-tax Act, 1922: sections 66(1) and 66A(2) · Historical commercial computation of share-trading profits
Sources & disclosures includedDownload original judgment / order
7-judge bench; 6:1 majority judgment delivered by S. K. Das, J.; A. K. Sarkar, J. dissenting. · S. K. Das, J. · J. L. Kapur, J. · P. B. Gajendragadkar, J. · A. K. Sarkar, J. · K. Subba Rao, J. · K. N. Wanchoo, J. · N. Rajagopala Ayyangar, J.
Assessment years: 1947-48
01 · Facts of the case
The assessee had long held shares as investments. From 1 April 1945 she converted them into stock-in-trade and began trading; for assessment year 1947-48 the dispute was whether business profit used original acquisition cost or market value on conversion (SCR pp.393-396; PDF pp.3-6).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
The majority held that the trading business began with shares introduced at their then market value, which therefore measured business cost against actual sale proceeds. This did not create a fictional self-sale and Kikabhai was distinguished. Sarkar J. dissented and would use historic acquisition cost (SCR pp.397-418; PDF pp.7-28).
Source: Primary judgment: discussion
03 · Judicial decision
By majority the High Court answer was upheld and Revenue's appeal dismissed with costs; assessable profit was sale proceeds less market value on 1 April 1945 (SCR p.418; PDF p.28).
Source: Primary judgment: decision
04 · Outcome / in whose favour
In favour of the assessee by 6:1 majority; the dissent supported Revenue's historic-cost approach (SCR pp.406-418; PDF pp.16-28).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: record the conversion date, contemporaneous market evidence and actual commencement of trading. The ruling separates pre-business investment appreciation from later trading profit but should not be projected onto subsequent statutory regimes without fresh review.
Source: Primary judgment: review point
Source & verification
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Statutory scope
Historical 1922 Act computation; no automatic application to later conversion, capital-gains or stock-in-trade provisions.
Later treatment
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