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2015 (4) TMI 554 - HC - Income TaxDetermination of nature of business - where loss resulting out of dealing in shares is more than the income arising out of loans and advances it can be said that the principal business of the assessee is not of granting loans and advances in the light of explanation appended to Section 73 of the Income Tax Act - Held that:- Income and business activity, according to the legislative mandate, are distinguishing factors. Therefore income alone cannot be taken into account in deciding whether the assessee is entitled to make a departure from the mandate appearing in Sub-section (1). In the case before us the activity of granting loans and advances is on a larger scale than the business of buying and selling shares. Both profit and loss are matters of chance in both the activities. Therefore profit alone was not made the distinguishing factor. Since business activity is also a distinct factor, we are inclined to think that the principal business of the company/assessee is granting loans and advances as would appear from the volume indicated in the chart above for a number of years. Therefore, the view taken by the learned Tribunal appears to be the correct view of the matter. - Decided in favour of assessee.
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