9911796707
TMI Blog2016 (3) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... in share trading activity on a consistent basis over a period of time. Hence the principal business of assessee company is that of granting loans and advances and thereby outside the ambit of Explanation to Section 73 of the Act. Accordingly, the share trading loss claimed by the assessee cannot be construed as speculation loss and accordingly we find no infirmity in the order of the Learned CIT(A) in this regard. - Decided against revenue - I.T.A No. 842/Kol/2013 - - - Dated:- 3-2-2016 - Shri N.V. Vasudevan, Judicial Member, and Shri M. Balaganesh, Accountant Member For The Appellant: Shri Arindam Bhattacharya, JCIT/ ld.Sr.DR For The Respondent: Shri D.S. Damle,FCA, ld.AR ORDER SHRI M.BALAGANESH, AM This appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of the assessee is granting of loans and advances so as to get out of the rigours of Explanation to section 73 of the Act. 3.1. The Learned AO passed an order u/s 143(3) read with section 254 of the Act on 30.12.2011 by treating the share trading loss as speculation loss going by the income composition of the assessee and concluding that the objects clause of the assessee do not contain the activity of lending and hence the interest income derived by the assessee on lending and funds deployment in money lending cannot be the determining factor for understanding the principal business of the assessee. Accordingly the Learned AO rejected the funds deployment theory of the assessee which was directed to be verified by the tribunal in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(A) has erred in citing the decisions of the ITA T Kolkata in the case of ITO vs. Baibhav Credit Portfolio (P) Ltd. and in the case of Valour Constructions Pvt. Ltd. with the observation that the assessee company's principal business is granting loans and advances whereas as per Memorandum of Association of the company, this is not included in the main objects and is only ancillary object. 4. That the Ld. CIT(A) has failed to appreciate the fact that the main business of the assesseecompany was share trading; not granting of loan as per the fund deployment data which barely indicates that the assessee company deployed much more fund towards share trading than the fund utilized in granting loans. 5. That the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Company might borrow and to vary or otherwise dispose of. exchange, transfer or alienate any of the investments, real estates and properties of the Company. 3. To act, as investors, guarantors, underwriters, financiers and to lend or deal with the money either-with or without interest or security, including In current or deposit account with any Bank or Banks, other person or persons upon such terms, conditions and manner as may from time to time be determined and to receive money on deposit or loan upon such terms and conditions as the Company may approve. Provided that the Company shall not do any banking business as defined under the Banking Regulation Act, 1949 . We also find from the paper book filed by the Learned AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be safely concluded that the Learned AO has been directed by this tribunal to make verification of the veracity of the figures of fund deployment given by the assessee and decide the impugned issue. We find that the Learned AO had completely ignored this fund deployment position of the assessee which would prove beyond doubt that the principal business of the assessee is granting of loans and advances and accordingly the provisions of Explanation to section 73 of the Act cannot be applied to the facts of the case. For the sake of convenience, the details of funds deployed by the assessee in each of the years is given below:- Funds deployed in (Rs in lacs) Year Ended Stock in Trade of shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry clear from the aforesaid section that when the principal business is that of granting loans and advances and if such company also engages itself in purchase and sale of shares, then the purchase and sale of shares activity would fall under the exception to Explanation to Section 73 of the Act. We have already held that one of the main objects of the assessee company is lending activity and more so the assessee is a NBFC registered with RBI having valid certificate of registration and the fund deployed in lending activity is much more than the fund deployed in share trading activity on a consistent basis over a period of time. Hence the principal business of assessee company is that of granting loans and advances and thereby outside the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
