TMI Blog2011 (1) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT (1997 -TMI - 5601 - SUPREME Court) has held that the principles of accountancy do not over-ride the provisions of the Income-tax Laws - Whether the assessee is carrying on a business or not is to be ascertained from the material placed before the Assessing Officer and not by a mere entry in the balance sheet - Therefore, the finding of the Tribunal is based on legal evidence and does not suffer from any legal infirmity which calls for interference. - IT APPEAL NO. 1131 OF 2006 - - - Dated:- 4-1-2011 - N. KUMAR AND RAVI MALIMATH, JJ. M.V. Seshachala for the Appellant. S. Parthasarathi for the Respondent. JUDGMENT N. Kumar, J. The revenue has prefer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of family concerns. On a careful examination of the material on record it held that, looking into the volume, frequency and regularity of transactions, it is clear that the transactions were made with a profit motive and not for investment. The principles of accountancy do not override the provisions of the Income-tax Laws and, therefore, merely on the basis of an entry in the balance sheet for the year 2000-01. where the shares are shown as an investment, the Assessing Officer was not justified in holding that the assessee was not in the business of shares and the shares held by him were only as an investment and, therefore, it set aside the order and allowed the deductions towards business expenditure. Aggrieved by the said order, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed the same. Before the Assessing Officer he has produced records to show that he is in the business of purchase and sale of shares every month which fact is not in dispute and, therefore, as held by the Supreme Court the principles of accountancy do not override the provisions of the Income-tax Laws and the question whether the assessee is carrying on a business or not is purely a question of fact, which is to be determined from the material on record and as rightly held by the Tribunal, the material on record clearly establishes the fact that the assessee was carrying on the business of shares and the shares held by him was not an investment and, therefore, he submits that no case for interference is made out. 6. From the material o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said case of the assessee for the assessment years 1997-98 to 1999-2000. In para IV of the returns of the income, the assessee has clearly mentioned that the business income was being earned from the share transactions. The Hon'ble Supreme Court in the case of Tuticorin Alkali Chemicals Fertilizers Ltd. v. CIT [1997] 227 ITR 172/93 Taxman 502 has held that the principles of accountancy do not over-ride the provisions of the Income-tax Laws. The question whether the assessee is carrying on a business or not is to be ascertained from the material placed before the Assessing Officer and not by a mere entry in the balance sheet. It is in this background, the Tribunal on a proper appreciation of the material placed by the assessee, has com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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