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TMI Blog2011 (7) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... in holding that the loss suffered on sale of shares is to be treated as a business loss and not capital loss?" 2. The assessment in the present appeals relates to the assessment year 1989-90. The only question that arises for consideration is as to whether the loss incurred in the sale of shares, by the assessee, is to be treated as a business loss or a loss under the head capital gains. 3. The assessee is engaged in the business of offering technology in the pharmaceuticals field, including basic and detailed engineering facilities, procurement and supervision and fabrication of plant and machinery. The assessee had filed the return of income of Rs.9,016/-, under Section 115 J of the Income Tax Act, 1961, for the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative of the assessee Company had stated, inter alia, that the assessee Company is in the field of developing and supplying the technical know-how in the field of pharmaceuticals, and it has been developing certain pioneering techniques in India, for the first time. In such circumstances, for having a greater involvement in the transfer and implementation of the technology, certain investments had been made on account of commercial expediency. The said investments have not been made with a view to invest the excess funds. Therefore, the loss on the sale of such shares would have to be treated as business loss and deducted against the business profits of the Company. 7. Relying on certain decisions, the representative of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by the Assessing Officer was erroneous and hence, prejudicial to the interest of the revenue. In such circumstances, the assessment order passed by the assessing officer was set aside and he had been directed to pass a fresh assessment order, as per law, after giving a reasonable opportunity of hearing to the assessee. 10. Aggrieved by the order of the Commissioner of Income Tax, the assessee went on appeal before the Income Tax Appellate Tribunal, Chennai. During the pendency of the appeal before the Tribunal, the Assessing Officer had passed an order, in compliance of the order passed by the Commissioner of Income Tax, under Section 263 of the Income Tax Act, 1961. As against the said order of the Assessing Officer, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee had been allowed. Challenging the said order passed by the Tribunal, the present appeals had been filed by the Revenue. 12. The learned standing counsel appearing for the Revenue had submitted that the assessee had not shown the expenditure incurred on the purchase of shares in the balance sheet and therefore, the loss on such investments cannot treated as business loss. In support of his contention, he had relied on a decision of the Supreme Court, in Rameshwar Prasad Bagla V. Commissioner of Income Tax (1973) 87 ITR 421) wherein, it had been held that the profit on the sale of the shares constituted capital gains, chargeable under Section 12B of the Income Tax Act, 1922. 13. It is not in dispute that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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