9911796707
TMI Blog2014 (9) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... der under Section 143(3) of the Income Tax Act (hereinafter referred to as the Act) held that the income disclosed by the appellant from dividend, commission and interest was liable to be assessed under the head "Income from other sources" and not under the head "profit & gains from business or profession" Being aggrieved by the order of the Assessing Officer, the appellant filed an appeal before the Commissioner of Income Tax (Appeal), who found that since the appellant had been purchasing shares and debentures and was also selling the same, the income derived in the form of interest, dividend, debentures and shares was liable to be assessed as business income and, therefore, such income was liable to be assessed under the head "profits & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinal principle of law relating to Income Tax that the income tax is single charge on a total income of an assessee. For the purpose of computation, the Statute recognises different kinds of income which it classifies under different heads of income. For each head of income, the Statute provides a mode for computing the quantum of such income. Section 56 of the Act deals with the categories of income which are chargeable under the head "Income from other sources". Sub-section (I) of Section 56 provides that the income of every kind which is not to be excluded from the total income under the Act shall be chargeable to income tax under the head "Income from other sources", if it is not chargeable to income tax under any of the heads specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im was income from business chargeable under Section 14 of the Act under the head profit against the business and profession cannot be accepted. Section 14 starts with the words "Save as otherwise provided by this Act", which indicates that for the purpose of charge of income-tax and computation of total income, all income shall be classified under the five following heads of income specified in Section 14 unless it is specifically provided otherwise elsewhere by the Act. On the other hand, Section 56(2) clearly provides that dividends would be chargeable to income tax under the head "Income from other sources". The mandatory character of Section 56(2) read with Section 14 is indicated by the language employed therein that the following in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s business income consist of purchase and sale of shares. The appellant does not purchase the shares with a view to get dividend, but the object of purchasing his shares is to earn profit by the sale of those shares. In our opinion earning of dividends is thus merely the incidental result to the main activity of the purchase and sale of shares. In our view, receipt of dividends will not be chargeable to income tax under the head "profits & gains from business or profession". In the light of the aforesaid, it is immaterial whether the shares are held by the appellant as stock-in-trade. The dividend income derived from these shares is specifically chargeable under the head "Income from other sources". Consequently, it is immaterial whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
