TMI Blog1988 (7) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ween the several heads of income and treating the appropriate portion thereof as expenditure against the dividend income and in modifying the assessment accordingly ?" The facts of the case are that the assessee formerly known as "Birds Investment Ltd.", is a limited company whose income was from interest on securities, business of purchase and sale of shares, dividends and interest, etc. The Income-tax Officer held that the interest paid and part of the other expenses which were claimed as a deduction against the business of purchase and sale of shares were attributable to the earning of dividend on shares of domestic companies. He, therefore, apportioned the expenses under different heads. The result of this was that the loans under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profession". This question is now concluded by several decisions of this court. In the case of the very assessee for the assessment years 1963-64 to 1965-66, an identical question came up for consideration before this court in CIT v. Birds Investment (Anniversary Investment Agency) (I. T. References Nos. 365, 367 and 369 of 1971 (Cal)). There, this court answered the identical question in the affirmative and in favour of the assessee. The said decision was considered by this court in the case of CIT v. New India Investment Corpn. Ltd. [1978] 113 ITR 778. There, this court held as follows (at p. 784) : "In view of the law as laid down by the Supreme Court, it appears to us that the expenditure in the instant case has been shown to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that the assessee was doing investment business and holding of stocks and shares partook of the nature of circulating capital. It was not possible to distinguish shares held solely for the purpose of earning dividend and to determine the borrowings made for the purpose of acquiring such shares and the interest paid thereon. It was not possible to attribute any particular item of expenditure for having been incurred solely for the purpose of earning dividend income. The shares being held as circulating capital for the business, the expenditure including the interest, has to be allowed as deduction in computing the business profits. In the premises, there is no question of allocation of such expenses between business income and dividend in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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