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TMI Blog2015 (12) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... led its return of income for A.Y. 1997-98 on 30.11.1997showing total loss of Rs. 11,76,10,593/- and thereafter Assessee filed revised statement of total income showing loss of Rs. 8,23,70,792/-. Subsequently the assessment was framed u/s. 143(3) vide order dated 13.03.2000 wherein the dividend income of Rs. 67,87,702/- was taxed under the head "income from other sources" and the business loss of Rs. 8,23,70,792/- was treated as "speculation loss" as against the "business loss" claimed by the Assessee and the claim of Assessee to adjust the dividend income against the loss was rejected. Aggrieved by the order of A.O., Assessee preferred appeal before Ld.CIT(A) who vide order dated 16.03.2001 confirmed the order of A.O. Against the order of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejecting the relevant Ground of Appeal raised before him by the respondent company to the effect that the impugned order passed by the Assessing Officer u/s. 271(1)(c) of the Income-tax Act is void and deserves to be quashed for the reason that it has been passed beyond the statutory period of limitation prescribed u/s. 275 of the Income-tax Act, 1961. We proceed to dispose of Revenue's appeal in ITA No. 1466/Ahd/2012. 5. A.O noticed that Assessee had earned dividend income of Rs. 67,87,702/- and had loss of Rs. 8.23 crore and had adjusted the dividend income against the loss. A.O while framing the assessment treated the loss as speculation loss and the set off of dividend income was denied by him as he was of the view that the set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Co. Pvt. Ltd. [80 ITR 21 SC] and Kokanada Radhaswamy Bank Ltd. [57 ITR 306] was perfectly valid. It was held in those cases that if the shares are held as a part of the trading assets, the dividend from those shares can be set off and claimed against the loss from the business. It has been finally held that dividend income was incidental to share business and, therefore, irrespective of the provisions contained in section 56 of the Act and Explanation to Section 73, loss should be adjusted against such business income. After consideration of all above facts, I am of the considered opinion that penalty u/s. 271(1)(c) is not eligible on the appellant. First of all, the appellant had disclosed all the relevant facts regarding the computa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al is allowed. 6. Before us, ld. D.R. supported the order of ld. CIT(A). Ld. A.R. on the other hand supported the order of ld. CIT(A) and further submitted that even on merits, the issue is covered in favour of the Assessee by the decision of Hon'ble Gujarat High Court in the case of CIT vs. Sphere Stock Holding Pvt. Ltd. (in Tax Appeal No. 2583 of 2009 order dated 23.08.2011). He also placed on record the copy of the aforesaid decision. He thus supported the order of ld. CIT(A). 7. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to the levy of penalty u/s. 271(1)(c) of the Act on the ground that Assessee was not entitled to adjust the dividend income against the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 56 of the Act and explanation to section 73, loss should be adjusted against such business income. We do not find any substantial question of law arising. Similar issue is discussed by the Apex Court in above-mentioned cases. Tax Appeal is therefore, dismissed. 8. In view of the aforesaid facts and in the absence of any contrary binding decision brought to our notice by Revenue, we find no reason to interfere with the order of ld. CIT(A) and thus the ground of Revenue is dismissed. 9. In the result, the appeal of Revenue is dismissed. C.O. No. 145/Ahd/2012 10. Before us, ld. A.R. submitted that he did not wish to press grounds raised in C.O and therefore the C.O is dismissed. 11. In the result, the appeal of Revenue and C.O of Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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