TMI Blog2000 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the business activity rather than investment activity and is not the finding wrong, unreasonable in law and against the legislative intention expressed in section 56(2) of the Income4ax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding that the expenditure was incurred only to preserve and protect the assessee's title to the units purchased by it and as such it is to be allowed under section 37(1) of the Income-tax Act ? (3) Whether, on the facts and in the circumstances of the case, the assessee is entitled to deduction of the expenditure on stamp paper for the purpose of registering the name of the purchaser with the Unit Trust of India under section 57(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n if the dividend from the units was held to be assessable under the head "Otber sources", the assessee was entitled to get deduction of Rs. 77,463 under section 57(iii) as expenditure incurred to facilitate the receipt of dividends in its favour. The Assessing Officer was of the view that the dividend income from the units was assessable under the head "Other sources" and the sum of Rs. 77,463 being expenditure incurred in the capital field could not be allowed as a deduction under section 57(iii) of the Act. The assessee has filed appeals before the Commissioner of Income-tax (Appeals). That appeal was dismissed. The assessee took up the matter in further appeal before the Tribunal and the Tribunal held that the dividend income could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The funds came from the existing business and the assessee was having one profit and loss account and balance-sheet and one common fund. The Tribunal found that this was an adventure in the nature of trade as was held in G. Venkataswami Naidu and Co. v. CIT [1959] 35 ITR 594 (SC). In this decision, the Supreme Court held that : "If a person invests money in land intending to hold it, enjoys its income for some time, and then sells it at a profit, it would be a clear case of capital accretion and not profit derived from an adventure in the nature of trade. Cases of realisation of investments consisting of purchase and resale, though profitable, are clearly outside the domain of adventures in the nature of trade. In deciding the character ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and exclusively with the intention to resell at a profit and the purchaser has no intention of holding the property for himself or otherwise enjoying or using it, the presence of such an intention is a relevant factor and unless it is offset by the presence of other factors it would raise a strong presumption that the transaction is an adventure in the nature of trade." Therefore, in the context of the above decision analysed, we agree with the Appellate Tribunal that the dividend obtained by the Unit Trust can be treated as income from profession or business. The next contention with regard to the purchase of stamp papers for Rs. 77,463. According to the assessee, this amount was spent for the purpose of registration of the units with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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