TMI Blog1978 (5) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... peals filed by the assessee before the Appellate Tribunal it was submitted on its behalf that it was an investment company and was not a dealer in shares as wrongly found by the authorities below. It was urged that it was formed with the main object of acquiring the holding shares and securities of joint stock companies. In support of the above contentions reliance was placed on certain clauses of its memorandum of association, certain articles of its articles of association, and statements of purchases and sales of investments since its incorporation including certain resolutions filed before the Tribunal. It was also argued that the assessee held shares mostly of companies managed by M/s. Andrew Yule Co. and in the accounting years it has sold those shares with the intention of changing its investment and, therefore, the surplus arising out of such sales was a capital accretion and not its commercial profit. In support of the above contentions reliance was placed on a number of well-known decisions and it was also argued that the revenue has failed to discharge the burden of proving that the said surplus was taxable in the hands of the assessee. Many documents were filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so facto become business income in all cases. The question whether a particular assessee is a dealer or an investor must be determined on the consideration of the entire facts and the impression created in one's mind after considering the facts and circumstances disclosed in a given case. The circumstances tabulated in the submissions of the assessee's representative referred to above, in our opinion, lend support to the assessee's contention. In our opinion what may be originally a capital investment may subsequently be converted into a trading activity by the conduct of the assessee in dealing with the shares, but for the said action of the assessee there must be clear evidence on record which, in our opinion, in the instant case is missing. We do not agree with the submission of the departmental representative that the history of the case as referred to above shows that the assessee being an investment company changed investments as a part of its activity of carrying on the said business. The change of investments, on the facts of the instant case, cannot, in our opinion, be termed as 'business profit' as having been obtained in the course of investment, as was argued by the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mixed question of law and fact, but this contention of Mr. Pal has not been accepted by Mr. Kalyan Roy, the learned counsel for the assessee. Mr. Roy, however, by accepting the law laid down in the above cases cited by Mr. Pal, has contended before us that inasmuch as the Tribunal, after taking into consideration all essential and relevant facts including the law laid down in those cases cited by Mr. Pal and also the cases cited on behalf of the assessee, has found as a fact that those shares were sold not "as a part of" the assessee's "activity of carrying on the said business", and that it was merely a change of investment, it must be held that the receipts were not revenue but capital receipts for "the mere fact that an investment company periodically varies its investment does not necessarily mean that the profits resulting from such variation is taxable under the Income-tax Act", as laid down by the Supreme Court in the case of Dalhousie Investment Trust Co. Ltd. v. Commissioner of Income-tax [1967] 66 ITR 473, 476 (SC). It is also the submission of Mr. Roy that, as the revenue has not challenged the facts found by the Tribunal as perverse or based on no evidence or irrel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income-tax v. Dalmia Jain and Co. Ltd. [1972] 83 ITR 438 (SC) and Commissioner of Income-tax v. Ashoka Marketing Co. [1972] 83 ITR 439 (SC). In support of his contention that we should answer this question on the facts found by the Tribunal inasmuch as the revenue has not questioned them, Mr. Roy has relied on the following observations of this court in the case of Commissioner of Income-tax v. East Coast Commercial Co. Ltd. [1970] 75 ITR 8, 17 (Cal) : " The nature of the transaction was before the Tribunal and it appears to us that the Tribunal had adverted itself to the main points of controversy in this case bearing in mind the correct principle in approaching this problem. Bearing in mind the correct principles the Tribunal had, on material before it, come to its conclusion which cannot be described as perverse or based on no evidence. We cannot, therefore, interfere with the same even though we, on re-appreciation of facts, may be inclined to take a different view of the matter." The revenue has not challenged the facts found by the Tribunal, as rightly contended by Mr. Roy. Further, it is not the case of the revenue that the Tribunal has misdirected itself in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the section refers to the words "attributable to the profits of the company assessed to agricultural income-tax" and, therefore, the construction suggested by Mr. Pal is not permissible or possible. This section gives relief to the shareholder who has received the dividends from the company, paying such dividend out of the profits and gain, where such profits and gains have been assessed to the agricultural income-tax in the hands of the dividend paying company. The quantum of relief is also specified in the section itself. Our above view is also supported by the decision of the Kerala High Court in the case of Commissioner of Income-tax v. A. V. Thomas Co. Ltd. [1974] 96 ITR 343, 347 (Ker) and hence we overrule the above submission of Mr. Pal. In the premises, we return our answer to both the questions in the affirmaive and in favour of the assessee. In the facts and circumstances of this case, we do not propose to make any order as to costs. DIPAK KUMAR SEN J.--I entirely agree with the judgment delivered by my learned brother and the conclusions to which he has arrived. I would only like to add a few words for myself. The cases decided in different courts in India ..... 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