Judgment :- VEERASWAMI J. The question referred to us is "Whether, on the facts and in the circumstances of the case, the loss of 21, 819 dollars on the sale of shares was a business loss deductible under section 10 of the Income-tax Act for the assessment year 1958-59 ?" * The assessee is a firm of partnership owning rubber gardens and other properties in Malaya, and deriving income from them. For the assessment year 1958-59, the assessee claimed deduction of a loss of 21, 819 dollars on sales of shares. The assessee had bought 200 shares of Rs. 250 each, in a certain Lakshmi Industries Limited, Keeranur, in 1940, the year in which that company itself was floated. The assessee-firm sold the said shares, during the assessment year, for Rs. 16, 000, thereby incurring loss. It claimed that this was a revenue loss, which it was entitled to deduct under the provisions of section 10. The Income-tax Officer did not accept that contention. His view was that the firm did not purchase the shares in the open market and one of the partners of the firm was interested in the company and that the firm also did not actually deal in shares of other companies during the relevant period. He came to the conclusion that the purchase of shares was only as an investment and therefore the loss resulting from the sale of the shares should be regarded as a capital loss. This view was maintained in further appeals of the assessee The Tribunal's order on this matter is cryptic and reads "The assessee is a money-lender, carrying on business in immovable properties too. It does not thereby mean as argued that the shares in question had been purchased as one of its items of stock-in-trade. The shares clearly represent only an investment." * In the statement of the case, the Tribunal pointed out that it was contended before it that the shares had not been purchased out of the funds of the money-lending business, which business was not carried on, and that the purchase of shares had been incorporated in the business books and therefore the shares were the stock-in-trade of the assessee's business. It is not clear whether this observation of the Tribunal in the statement of the case is entirely correct and represented the real position. It is not clear whether this observation of the Tribunal in the statement of the case is entirely correct and represented the real position. But we will assume that the shares were purchased, as argued by Mr. Srinivasan for the assessee, out of the funds of the money-lending business. In our view, it does not necessarily follow from that mere fact that the shares formed part of the stock-in-trade of the money-lending business. Nor can it be said that the fact that the shares were shown as an asset in the books of the money-lending business, invested the shares with the character of stock-in-trade of that business. It is possible that though a person does not carry on business in stocks and shares, purchase of shares may yet be part of the stock-in-trade of his money-lending business. But to establish that fact, there must be cogent evidence. Treatment of such shares in the course of the money-lending business will afford such evidence. For instance, if during the course of the money-lending business, shares are pledged and the money realised therefrom is utilised in the money-lending business or the shares are sold and the proceeds are brought into the money-lending business, or there is evidence of purchase and sale of shares as part of the money-lending business, a finding may be justified, in such cases, that the shares formed part of the stock-in-trade of the money-lending business. But, in this case no evidence appears to have been adduced to show the treatment of the shares and to establish that by such treatment of the shares, they were, or became, part of the stock-in-trade of the money-lending business. Apparently, the Tribunal had this approach in mind, though it did not in so many words express it in its orderThe question referred to us is answered against the assessee with costs. Counsel's fee Rs. 250.