TMI Blog2006 (4) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... dlik for the appellant. JUDGMENT 1. This is an appeal under section 260A of the Income-tax Act, 1961, filed by the Commissioner of Income-tax, Indore (MP), against the order dated October 28, 2005, passed by the Income-tax Appellate Tribunal in I. T. A. No. 570/Ind/1999. 2. The facts briefly are that for the assessment year 1996-97 the appellant filed a return on November 14, 1996. In the said return the assessee had disclosed that it had earned a business income of Rs. 14,36,077 but had showed set off of the said income of Rs. 14,36,077 against the losses brought forward from the previous years and after such set off had declared a business loss of Rs. 11,87,397. By order dated October 23, 1998, the Assessing Officer held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany itself as 'capital assets' while claiming capital loss on account thereof in the assessment years 1998-99 and 1999-2000 ?" 4. Mr. Jain learned senior counsel for the appellant submitted that the income or loss arising out of sale of shares and debentures carried on by the assessee has to be treated as income or loss from other sources and not from income or loss from business. 5. But we find from the order dated June 29, 2004, of the Tribunal in I. T. A. No. 569/Ind/99 for the assessment year 1994-95 which has been followed by the Tribunal in the impugned order for the assessment year 1996-97 that the Tribunal has given the following reasons for coming to the conclusion that the income or loss of the assessee out of the transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise and enforce all rights and powers conferred by or incidental to the ownership thereof. 3. To lend money on securities and properties or otherwise to or with any company, firm, person or association whether falling under the same management or otherwise in accordance with and to the extent permissible under the provisions contained in the Companies Act, 1956, with or without security and on such terms as may be determined from time to time. However, the company shall not carry on the business of banking as defined under the Banking Regulation Act, 1949.' " 6. From these objects it becomes clear that the assessee-company is an investment company. This also becomes clear from the findings of the Assessing Officer and contents of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturing company and was specifically prohibited by the memorandum of association from investing its funds not immediately required for business except in the scheduled banks, which is not the case before us. 7. We have already noticed that the assessee-company's main object is carrying on of business of investment and it has actually made investments in quoted as well as unquoted shares and debentures and income therefrom is definitely business income. In these circumstances, we find nothing wrong with the order of the learned Commissioner of Income-tax (Appeals) and confirm the same. 8. It would be clear from the aforesaid reasons given by the Tribunal that the main objects of the assessee-company included the carrying on of b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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