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TMI Blog2012 (8) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... nd debentures. For the assessment year 1992-93, the assessee had dividend income from the shares which were retained and not sold during the year. Though the assessee returned the said dividend income under the head "other sources", at the time of assessment, the assessee claimed for setting off of the carried forward business loss to the extent it could not be set off against profits and gains of the business; against such dividend income. In fact, the claim of the assessee was that the dividend income obtained by the assessee during the year ought to be considered as profits and gains of the business, since the dividend was directly attributable to the business of the assessee, i.e., derived from the shares which ought to have been consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, would contend that the assessee himself has returned the income as "income from other sources" and cannot make a volte-face during the assessment proceedings claiming it to be business income. The learned Senior Counsel would also place reliance on the decision of the Supreme Court in Bengal & Assam Investors Ltd. v. Commissioner of Income Tax [(1966) 59 ITR 547]. 6. In Investment Ltd. case (supra) the assessee Company was incorporated with the object, inter alia, of investing its funds in debentures and shares and for acquiring, holding and dealing with such debentures and shares. While for the assessment years 1952-53, 1954-55 and 1955-56 the Income Tax Officer accepted the claims of the company that the shares and securities being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a dispute was never raised by the Revenue, the question was answered in favour of the assessee. 8. The learned Senior Counsel for the Revenue has placed reliance on the Supreme Court judgment in Bengal & Assam Investors Ltd. case (supra). The assessee was an investment company; and the dividend it earned, on the shares it held, was held to be not "business income". On facts, it was clearly held that the shares held by the investment company were not stock-in-trade of the company and, hence, the dividend could not be assessed as business income. It was held: "It seems to us that on principle before dividends on shares can be assessed under section 10, the assessee, be it an individual or a company or another other entity must c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessee is more apposite. In Investment Ltd. case (supra), the Supreme Court held that method of accounting regularly employed by the assessee can be discarded only if the taxing authority is of the opinion that the income earned cannot be properly deduced therefrom. The method employed by the company in valuing stock at cost and describing such stock in the balance-sheet as "investments", were held to be not decisive of the fact that the stock valued was not stock-in-trade. The finding of the first appellate authority as well as the Tribunal that the shares held by the assessee, which earned dividend income, constituted stock-in-trade; does not necessarily give rise to a question of law. The appellate authorities having concurred o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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