TMI Blog2018 (7) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... 91.68% of its total income, then in the absence of any challenge to the finding of fact, it cannot be a subject of inquiry. Once the finding of fact has not been challenged, it must follow that Section 73 of the Act which introduces a deeming fiction to define a speculation business will not apply as the bracketed portion in the Explanation carves out an exception so far as main income is from “Income from other sources”. Thus, in our view, the question has proposed for our consideration stands concluded by the decision of this Court in Darshan Securities Pvt. Ltd. [2012 (2) TMI 117 - BOMBAY HIGH COURT] As in the present fact, the respondent is an Investment Company. Therefore, the question of law referred to us for our opinion is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing officer held that the assessee was hit by the explanation to Section 73 of the Act, the CIT(Appeals) held otherwise. Referring to the orders of the Tribunal reported in Shree Swamy Samarth Cement Depot Vs. 4th ITO (32 ITD 806) and Himalaya Co. Ltd. Vs. CIT (30 ITD 139)(Cal.), he accepted the assessee's contention and held that it was an investment company. 3. Before the Tribunal the Revenue contended that the CIT(A) had ignored the fact that the assessee's income mainly consisted of income from the business of trading in yarn, steel and shares etc. and therefore it ceased to be an investment company. It was also contended that the CIT(A) failed to appreciate that the gross total income of the assessee mainly consiste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsists mainly of income which is chargeable under the heads Interest on securities , Income from house property , Capital gains and Income from other sources ], or a company [the principal business of which is the business of trading in shares or banking] or the granting of loans and advances) consists in the purchase and sale of shares of other companies, such company shall, for the purposes of this section, be deemed to be carrying on a speculation business to the extent to which the business consists of the purchase and sale of such shares] 6. The Tribunal in the Statement of Case records as a fact found by the Tribunal that the assessee's income mainly consists of income from other sources. Therefore, held by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) Profit from trading in yarn ₹ 84,802 b) Profit from trading in steel ₹ 7,174 c) Service charges received shown as business income ₹ 2,24,94,436 d) Commission income shown as business income ₹ 24,31,560 e) Loss in trading of shares ₹ 2,74,09,727 f) Dividend / interest ₹ 11,40,097 This working evidences that the loss on trading in shares at ₹ 2.74 crores has been taken into account to arrive at income from business. 9. Thus, the basic premises on the part of the Revenue that the respondent assessee's income mainly consisted of income from business is factually incorrect. Once it is found as a fact in the order dated 17th September, 1998 of the Tribunal that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fairly states that if the Revenue's submission that the assessee's income mainly consists of business income is not accepted, then on the basis of the principles laid down in Darshan Securities Pvt. Ltd. (supra), the question would have to be answered in the affirmative i.e. in favour of the respondent assessee and against the appellant Revenue. 12. It is a settled position as held by the Calcutta High Court in Eastern Aviation and Industries Ltd. Vs. CIT, 208 ITR 1023 and Aryasthan Corporation Ltd. Vs. CIT, 253 ITR 401 , the expression Investment Company means a company whose gross total income consists mainly of income chargeable under the head Income from house property, capital gains and income from other sources. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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