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TMI Blog2011 (10) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2.2010 of Commissioner of Income Tax (Appeals) for the Assessment Year 1996-97. The assessee in this appeal has raised disputes on two different grounds. 2. The first dispute is regarding the decision of A.O. treating the loss from purchase and sale of shares as speculation loss in place of business loss declared by the assessee. The A.O. during the original assessment proceedings noted that the assessee had incurred loss of ₹ 1,37,83,962 from trading in shares which had been declared as business loss. The Assessing Officer asked the assessee as to why the loss should not be treated as speculation loss under the provisions of Explanation to section 73. The assessee explained that the income of the assessee mainly consisted of dividend, profit on sale of investment and other income and therefore the provisions of Explanation to section 73 were not applicable. The details of income was given by the assessee as under : i) Dividend ₹ 23,47,650 ii) Profit on sale of investment ₹ 85,38,736 iii) Misc. income ₹ 22,898 Total : ₹ 1,09,09,284 2.1 The A.O. did not accept the explanation given by the assessee. It was observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting loans and advances and therefore Explanation to section 73 was attracted. The Special Bench had considered the decision of the Tribunal in case of Concord Commercial Pvt. Ltd. (supra). The CIT(A) noted that loss from share trading was much more than income from other sources and therefore held that Explanation to section 73 was applicable in this case and accordingly upheld the order of A.O. treating the loss as speculation loss. Aggrieved by the said decision, the assessee is in appeal before the Tribunal. 2.4 We have heard both the parties, perused the records and considered the rival contentions carefully. The dispute is regarding nature of income from purchase and sale of shares under the provisions of Explanation to section 73. As per the said Explanation, the case of company whose gross total income does not consist mainly of income chargeable under the head income from house property , capital gain and income from other sources or the principal business of which is not granting loans or advances, if any part of business of the company consists of purchase and sale of shares of other companies, then, such company is deemed to be carrying on speculation bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand created as per the original assessment order could not be deemed to have been extinguished by virtue of appeal. For the said proposition, he placed reliance on the judgment of Hon ble High Court of Delhi in case of Bharat Commerce Industries Ltd. Vs. Union of India (210 ITR 13) and the judgment of Hon ble High Court of Madras in case of Super Spinning (244 ITR 814). The CIT(A) also referred to the judgment of Hon ble High Court of Madhya Pradesh in case of Pitamber Das Duli Vs. Union of India (148 CTR 352) in which it was held that when the original order of the A.O. was upheld by the Tribunal though it might have been set aside, the interest would date back to the original order. The CIT(A), therefore, confirmed the order of the A.O. levying the interest from the date of demand created as per the original assessment order. Aggrieved by said decision, the assessee is in appeal before the Tribunal. 3.1 Before us, the learned A.R. for the assessee submitted that the issue was covered in favour of the assessee by the Circular No.334 Dt.3.4.1984 of CBDT in which it has been held that when the Tribunal restored the issue to the file of A.O., interest cannot be levied from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egoing legal position will apply mutatis mutandis to the proceedings under other direct taxes also. 3.3 In view of the Circular No.334 Dt.3.4.1982 of CBDT, in case, the assessment is set aside by CIT(A) and setting aside become final, interest under section 220(2) has to be charged only after expiry of 35 days from the date of service of demand notice pursuant to the fresh assessment order. But in case the order of CIT(A) is subject matter of further appeal and the Tribunal has restored the order of Assessing Officer either in part or wholly, the interest payable under section 220(2) will be computed with reference to the due date reckoned from original demand notice and with reference to the tax finally determined in the assessment. In the present case, the original order of assessment was confirmed by CIT(A) but on further appeal, the Tribunal set aside the order of CIT(A) and the issue restored to the Assessing Officer. Therefore in terms of the Circular of CBDT (supra), the interest under section 220(2) has to be charged only in respect of demand raised as per the fresh assessment order. The CIT(A) following certain judgments has held that interest under section 220(2) h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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