TMI Blog2005 (1) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... estions: This appeal was admitted on the following two grounds: "(a) Whether, for computing the profits in terms of section 32AB(3) of the Act, the income by way of dividends, interest on securities, property income, which is treated as business income under the provisions of Parts II and III of Schedule VI to the Companies Act, 1956, is to be excluded and deducted under the said section is not to be allowed with reference thereto? (b) Whether the petitioner can be considered as a trading company within the meaning of the Finance Act, 1989, and Finance Act, 1990?" These appeals arise out of a common judgment of the learned Tribunal covering five assessment years between 1989-90 and 1993-94 comprising five appeals. The deficit court fees have since been paid. For the sake of convenience, we may answer the second question first. The second question: Assessee whether a non-trading company: So far as the second point is concerned, which we were supposed to answer first, it covers the three assessment years 1989-90, 1990-91 and 1991-92. The assessee had claimed itself to be a non-trading company in respect of these three assessment years in order to avail of the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly pointed out by Mr. Bajoria, that the computation of income is made according to the Income-tax Act, 1961 (the IT Act), under different heads as specified in section 14 thereof. So far as the profits and gains of business or profession, which are being assessed in the present case, would not be the determining factor as to whether the company is a trading company or a non-trading company. Reliance was placed by Mr. Bajoria on the decision in J. Thomas and Co. Ltd. v. CIT [2004] 267 ITR 585 (Cal) in which the present assessee was held to be a non-trading company in respect of the assessment years 1986-87,1987-88 and 1988-89. However, this was sought to be distinguished by Mr. Mullick on the ground that the facts of that case were different since it was concerned with the question which was confined to the determination as to whether as tea broker and auctioneer the assessee was a trading company or not. This was replied to by Mr. Bajoria on the basis of question No. 1 involved in the said decision on the foundation whereof the second question was dependent when the facts are not in dispute. This question seems to be of no relevance in the present case in view of the admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we do not find that the assessee could be treated differently from what was found in the decision in J. Thomas and Co. Ltd. v. CIT [2004] 267 ITR 585 (Cal). The moneylending business or receiving the interest or trade advance or trade debts as contended by Mr. Mullick would not change the characteristics of the company from a non-trading to a trading company as was held in the earlier decision. Mr. Mullick had relied on the definition of trade in Prem's Judicial Dictionary, Volume 2, page. 1608. He contends that any kind of business activity comes within the definition of trade as defined therein. But the question is to be decided on the basis of the definition of trading activities as it is understood in common parlance in the present case. It was already found in J. Thomas and Co. Ltd. [2004] 267 ITR 585 (Cal) that the assessee was not carrying on trading activities for the reasons noted therein which is also not in dispute. For the relevant assessment year, as, in his usual fairness, Mr. Mullick pointed out, we see no reason to disagree with the view taken by the other Division Bench in the case of J. Thomas and Co. Ltd. [2004] 267 ITR 585 (Cal). The first question: Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 (Cal); Apollo Tyres Ltd. v. CIT [2002] 255 ITR 273 (SC) and various other decisions on which Mr. Bajoria had relied to contend that there is no point which requires reconsideration so far as this decision is concerned. After having considered the contentions of Mr. Mullick, it appears that it is the income from profits and gains of business and profession which is eligible for deduction under section 32AB provided the amount out of such income is deposited under sub-section (1)(a) thereof. The question of deposit is not in dispute. The dispute is with regard to the income from a particular head, which is being deposited namely, those other than the head of income from business and profession, which would not be eligible within the limit of 20 per cent. provided in clause (ii) of sub-section (1). This question does not seem to be of any consequence in view of the fact that this income of eligible business is to be computed in view of sub-section (3) according to sub-section (5) of section 32AB. When a particular mode of computation has been provided for which substantially covers widely an area under the Companies Act rather than that being covered by the Income-tax Act, as was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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