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TMI Blog2012 (11) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... was applicable in respect of the loss incurred by the appellant in the business of trading in shares and such loss was to be treated as speculation loss and its purported findings in that behalf are arbitrary, unreasonable and perverse? (ii) Whether the Tribunal was justified in law in not considering and/or dealing with the appellant's contention that the interest earned on loans was to be assessed under the head "income from other sources" and since the interest income was higher, the losses in share-trading could not be treated as speculation loss? (iii) Whether and in any event and even if the interest income is held to be assessable under the head "business", such business was required to be treated as the appellant's principal busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as speculation loss. However, A.O. did not accept the explanation offered by the appellant and the said income was assessed only under the head "business income" and not under the head "income from other sources". It was also found by the Assessing Officer that for more than 10 months of the year, less than 50% of the fund available was utilized in its business of granting loans and advances. The Assessing Officer called upon the assessee to explain further in that regard in view of the above findings. The explanation offered was not accepted by the A.O. and treated the loss suffered by the appellant in the business of share trading as speculation loss applying explanation of Section 73 of the Income Tax Act, 1961. The above order w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the end of the year the assessee's principal business was that of a granting loans and advances was not justified. He submits that once a particular business is found to be principal business as at the end of the year, such business alone can be regarded as assessee's principal business. It would be illogical to suggest that the business of granting of loans and advances would be accepted as the principal business because it was carried on at the beginning and major part of the year though before the end of the year the assessee has substantially moved out of it, and went for some other business. He submits referring to the decision of this Court in case of Peerless Financial Services Ltd. v. C.I.T. reported in (2011) 335 ITR 452 (Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting of loans and advances. Consequently, the assessee is not covered by any of the exceptions provided under explanation to Section 73 of the Income Tax Act, 1961. Its business in the purchase and sale of shares of other companies is therefore to be treated as speculation business and the loss incurred by the assessee in its business of purchases and sales of shares will, therefore, treated as speculation loss. Both CIT (Appeals) and the learned Tribunal on fact have accepted the aforesaid findings. In view of the aforesaid factual findings which has not been challenged on the ground of perversity the benefit of the explanation to Section 73 of the Income Tax Act, 1961 as claimed the appellant has rightly been refused. After hearing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to speculation business as they apply in relation to any other business. (4) No loss shall be carried forward under this section for more than [four] assessment years immediately succeeding the assessment year for which the loss was first computed. [Explanation. - Where any part of the business of a company ([other than a company whose gross total income consists mainly of income which is chargeable under the heads "Interest on securities", "Income from house property", "Capital gains" and "Income from other sources"], or a company 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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