9911796707
TMI Blog2014 (4) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... rokers Pvt. Ltd. 3. Facts necessary for disposal of the appeal are stated in brief. The assessee company is mainly engaged in share and stock broking apart from trading in shares. During the course of assessment proceedings the AO noticed that the assessee company received unsecured loan of Rs. 18,40,000/- from M/s. Bankers Shares and Stock Brokers Pvt. Ltd. (hereinafter referred to as BSPL). The assessee is holding 1,00,000 shares of out of 1,00,200 shares of BSPL. In other words, 99.80 percent of issued, paid up and subscribed shares of BSPL are held by the assessee company. The AO further noticed that BSPL had an accumulated profit of Rs. 8,69,229/- as on 31.03.2008. On the amount received as unsecured loan the assessee company paid a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vanced only to meet the requirements of the holding company as "unsecured loan" and not as inter corporate deposit proves that it is not an advance given in the ordinary course of its lending activity. He further stressed upon the fact that the main business of the lending company is share trading from where it has earned more income and thus it cannot be said that it was actively engaged in substantially lending money on interest. Moreover, for indulging in the business of financing, the lending company should have obtained license from government authorities. He thus concluded that provisions of section 2(22)(e) of the Act comes into play in the instant case. 5. Aggrieved, assessee contended before the CIT(A) that in order to prove that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SPL. However, the learned CIT(A) has not taken cognisance of them. Before me the learned counsel for the assessee placed a copy of the RTI application and the reply thereto to submit that the assessee furnished the Balance Sheet of BSPL and the Directors' Report of BSPL alongwith the written submissions which were not properly considered by the CIT(A). He also relied upon the decision of the Hon'ble Bombay High Court in the case of CIT vs. Parle Plastics Ltd. 332 ITR 63 in support of his contention that section 2(22) uses the expression "substantial part" which does not convey the idea of being major part or the part that constitutes majority of the whole. The Hon'ble High Court observed that various factors and circumstances are re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y gone through the judgement of the Hon'ble Bombay High Court wherein the expression 'substantial part' was explained. As rightly discussed by the Hon'ble Bombay High Court various factors and circumstances need to be looked into while considering whether a part of the business of the company is its substantial business. In the instant case the learned CIT(A) appears to have not properly appreciated the submissions made before him in the form of written submissions. No doubt, the learned counsel for the assessee adverted our attention to page 42 of the paper book, i.e. Balance Sheet of BSPL but this does not indicate that the BSPL had, as a matter of policy, as per the Memorandum and Articles of Association of the company advanced a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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