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TMI Blog2014 (9) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... arning substantial dividends on the shares but one has to consider from the point of view that the assessee 's business income consist of purchase and sale of shares - assessee does not purchase the shares with a view to get dividend, but the object of purchasing his shares is to earn profit by the sale of those shares - earning of dividends is merely the incidental result to the main activity of the purchase and sale of shares - receipt of dividends will not be chargeable to income tax under the head "profits & gains from business or profession" - relying upon Commissioner of Income-Tax, Bombay City-II Vs. D.G.Goenka [1980 (4) TMI 41 - BOMBAY High Court] the dividend income arrived at by the appellant was chargeable under the head "Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals), accordingly, allowed the appeal and deleted the addition so made by the Assessing Officer. Income Tax Department, being aggrieved, filed a second appeal before the Tribunal, which was allowed. The Tribunal set aside the order of the appellate authority and restored the order of the Assessing Officer holding that the income of the assessee derived from dividend, commission etc was liable to be assessed under the head Income from other sources under Section 56(2) of the Act. The assessee, being aggrieved by the order of the Tribunal, has filed the present appeal under Section 260A of the Act, which was admitted on the following substantial questions of law : A. Whether on the facts and in the circumstance of the case the ITAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fies income under five heads. For the purposes of charge of income-tax and computation of total income, all income shall be classified such as salaries, income from house property, profits and gains of business or profession, capital gains or income from other sources. Any income, which is not to be excluded from the total income under the Act, is chargeable to income tax under the last head namely; Income from other sources , if it is not chargeable to income tax under five earlier heads. Clause (i) of sub-Section (2) of Section 56 specifically provides that dividends would be charged to be income under the head Income from other sources . Therefore, for the purpose of chargeability of income-tax income from dividends itself fall within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me tax under the head Income from other sources and the intention of the legislature in making dividends chargeable under the heading Income from other sources is apparently clear. The legislature has made various heads of income. Every item of income would fall under a particular head or the other. For the purpose of computing the income, the particular section dealing with that head will have to be looked into. The various sources of income, profit and gains which have been so specified under various heads become chargeable under Section 14 of the Act either as income from salary, property, profits and gains in business and profession, capital gains or income from other sources. In the instant case, the appellant held shares a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies on business of purchase and sale of shares. We find that the Tribunal after relying upon the decisions of the Bombay High Court in Commissioner of Income-Tax, Bombay City-II Vs. D.G.Goenka, 1981 ITR (129), 260 and of the Gujarat High Court in additional Commissioner of Income-Tax Vs. Laxmi Agents P.Ltd.,1980 ITR (125), 227 had rightly come to the conclusion that the dividend income arrived at by the appellant was chargeable under the head Income from other sources . For the reasons stated aforesaid, we do not agree with the decision cited by the learned counsel for the assessee of the Delhi High Court in Commissioner of Income-Tax Vs. Excellent Commercial Enterprises and Investment Ltd., (2006) 282 ITR 423 (Delhi). We do not find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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