TMI Blog1992 (8) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... on purchase and sale of shares could be adjusted against other income of the assessee. 3. The facts of this case lie in a very narrow compass. The Revenue authorities in this case have held that the assessee was doing speculative business in the purchase and sale of shares. The learned Counsel for the assessee conceded that such business was speculative in nature. He, however, submitted that the assessee was an investment company and in view of Explanation to section 73 of the Act, the business of a company other than investment company consisting in the purchase and sale of shares of other companies, it could be said that such company was carrying on speculation business to the extent to which the business consisted of purchase and sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee's second paper book for the assessment year 1984-85, it was submitted that for all the three assessment years under consideration, there was business loss whereas main positive income was only from property and from other sources. It was, therefore, submitted that the assessee's case fell squarely within the definition of ' investment company ' as defined under section 109(ii) of the Act and, therefore, in view of Explanation to section 73, the assessee's business could not be deemed as speculative business in which the speculation loss could be adjusted only against speculation profit. According to the learned counsel for the assessee such losses incurred by the assessee amounting to Rs. 4,90,223, Rs. 67,910 and Rs. 13,23,285 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny the principal business of which is the business of 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 of a speculation business to the extent to which the business consists of the purchase and sale of such shares. " 6. Investment company under section 109(ii) of the Act is defined as under :--- " 109(ii) : ' Investment company ' means a company whose gross total income consists mainly of income which is chargeable under the heads ' interest of securities ', ' income from house property ', ' capital gains ' and ' income from other sources '. In the above definition of investment company, it is now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the matter, the reference to the objects of the memorandum of association would not be relevant. 7. As per details submitted by the learned Counsel for the assessee, the income of the three years as declared by the assessee is as under :--- " AY 1982-83 AY 1983-84 AY 1984-85 Profit/loss as per Rs. Rs. Rs. B/sheet 6,02,747 5,38,453 6,66,273 Property Income 21,55,504 25,33,231 26,49,622 Income from other sources 1,29,767 1,37,498 1,34,978 ---------------- ---------------- ---------------- 22,85,271 26,70,729 27,84,600 Less business loss 21,00,662 25,58,694 26,03,282 ----------------- ----------------- ----------------- Net 1,84,669 1,12,035 1,81,318. " ----------------- ----------------- ----------------- From the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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