TMI Blog1979 (11) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... recisely that the assessee is a company whose business consists wholly or mainly in holding of investments. Hence these four appeals by the assessee. 2. The question posed before us for our consideration is whether the assessee is a company whose business consists wholly or mainly (the stress is on mainly) in holding of investments. It would appear that the Department has a case that the assessee is a dealer in shares. But that is not the principal business. That is why the stress seems to have been laid on mainly in the holding of investments. Before we decide this question, it would be better to state the law on the point and set out the lines on which that question should be approached. The Supreme Court in CIT vs. Distributors (Baroda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court in 83 ITR was found to have been amply satisfied. In the High Court Judgment in Nawa Estate's (P) Ltd.), which was the subject matter of the appeal by the assessee before the Supreme Court in 106 ITR 45, the fact found was that the main source of income of the assessee was from property. The Calcutta High Court in the judgment then observes in paragraph 14 that laying out of money in house and immovable property with a view to earning income regularly may, be regarded as investments in appropriate cases. Then in para 18 it has been stated that the main business of the assessee, it seems to us on the facts found by the Tax authorities below was the business of investing in house property and earning incomes form them year to year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court would have overruled the same. So we reiterate the position that what we have to do is only to see whether the test laid down in 83 ITR is satisfied. 3. Now let us see how far the test is satisfied. The assessee is a company incorporated in 1942. A perusal of the four asst. orders for the four years will show that the principal source of income of the assessee is income from dividends. So if the test is principal source of income a contended by the Department, then the assessee has no case at all. Vice versa what appears to us that if the test is organized activity as in 83 ITR, then the Department also has no case. 4. The Annexure-A to the order of the AAC gives an analysis of investments for these assessment years. That c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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