TaxTMI 
TaxTMI 
1973 (5) TMI 23
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.... off against the dividend income of Rs. 3,12,734 which he had received during the accounting year. This dividend income represented the dividend received by the assessee from the shareholding in Jaipur Udyog Ltd. The assessee had also claimed allowance of interest amounting to Rs. 1,95,870 which was payable to M/s. Asia Udyog Pvt. Ltd. on the amount borrowed by the assessee for the purchase of the shares of Jaipur Udyog Ltd. The Income-tax Officer disallowed the assessee's claim for set-off on the ground that the dividend income did not constitute income from business under section 10 of the Indian Income-tax Act, 1922 (hereinafter referred as " the Act ") but constituted income from other sources under section 12(1A) of the Act. He also di....
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....me from interest on securities, income from property, income from business and income from dividends. The income from business was from the business of a dealer in shares. It is not disputed that the loss claimed by the assessee amounting to Rs. 2,52,121 represented the loss incurred by the assessee in the earlier years from this business in shares. Under section 24(2) of the Act, the assessee would be entitled to set off this loss of earlier years against his business income in shares and not against his income from any other source. Therefore, the assessee would be entitled to set off the earlier years' loss against the dividend income received by him from his shares in Jaipur Udyog Ltd. only if these shares constituted his stock-in-trade....
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....nt Commissioner that the assessee had purchased the shares in question on April 30, 1955, which fell within the assessment year 1955-56. The exact date when the controlling interest in Jaipur Udyog Ltd. passed from the hands of the assessee to the Jain group is not available on the record and the Tribunal in its order merely stated that-- "the controlling interest in the Jaipur Udyog Ltd. had already passed from the hands of the assessee to Jain group ". This would mean that some time between the assessment year 1955-56 and the assessment year under reference, namely, 1958-59, the controlling interest had passed from the hands of the assessee to the Jain group. This would again mean that some time between the assessment year 1955-56 and t....
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....ope of section 34 of the Act, observed as follows : " That the question whether sales of shares were by way of changing the investments or by way of trading in shares had to be decided on a consideration of different circumstances, including the frequency of the sales, the nature of the shares sold, the price received as compared with the cost price, and several other relevant facts.......but whether the assessee had the intention to make a business profit as distinguished from the intention to change the form of the investments was really an inference to be drawn by the assessing authority from the material facts taken in conjunction with the surrounding circumstances." In the present case, the assessee had acquired the shares on April ....
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....le of the shares in the assessment years 1959-60 and 1960-61, i.e., within the period of 4 years, is more consistent with the holding of the shares by the assessee as the stock-in-trade than with the holding of the shares by the assessee by way of investment. In any case, there is no positive evidence in support of the stand taken by the revenue that even after the controlling interest in Jaipur Udyog Ltd. had passed from the hands of the assessee, he continued to hold the shares by way of investment. Although the Income-tax Officer had disallowed the assessee's claim of interest on the amount borrowed for the purchase of these shares, the Appellate Assistant Commissioner had allowed the assessee's claim and this amount of interest was all....
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.... its conclusion and which have been referred by us in the foregoing paragraphs, do justify the conclusion drawn by the Tribunal that the shares in question were held by the assessee during the accounting year as stock-in-trade. Although the Income-tax Officer appears to have disallowed the assessee's claim for set-off of the losses of earlier years against the dividend income of the present year on the ground that the business losses cannot be set off against dividend income under section 12(1A) of the Act, this ground is not pressed by the learned counsel for the revenue, as it is now settled that if the dividend income which is sought to be assessed under section 12(1A) of the Act is derived from the stock-in-trade of the assessee, such d....