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TMI Blog2005 (5) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of law arises for consideration in this case. The appeal is, therefore, dismissed - - - - - Dated:- 12-5-2005 - Judge(s) : SWATANTER KUMAR., MADAN B. LOKUR JUDGMENT The judgment of the court was delivered by Swatanter Kumar J.- Before the Income-tax Appellate Tribunal, the Income-tax Officer, Ward-II New Delhi, while preferring an appeal against the order of the Commissioner of Income-tax (Appeals) dated December 1, 1999, relating to the assessing year 1996-97, raised the following issue: "On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) was not justified in directing the Assessing Officer, to set-off the unabsorbed brought forward losses against dividend income which is charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, income whether directly arising out of such commodity on its sale or income, i.e., arising incidental to holding shares as stock-in-trade would, in my view constitute business income although in normal circumstances such dividend income should be classified as income from other sources and taxed accordingly. Dividend income in the hands of a normal investor would be taxed as income from other sources but in the appellant's case, who is trading in such shares and is holding it as a stock-in-trade, such income would assume a different flavour and character and would have to be treated as business income although usual classification of such income would be dividend income taxable under the head 'Income from other sources'. 10. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as income from other sources and in any case no set-off would be permissible as the assessee has not carried on its business in the relevant year. On the other hand, learned counsel appearing for the respondent-assessee while relying upon the judgment of this court in the case of CIT v. R. Dalmia [1974] 96 ITR 463 and the judgment of the Madras High Court in the case of CIT v. Ramnath Goenka [2003] 259 ITR 26 contended that the dividend income from shares and otherwise can be set-off against the business loss of the earlier years in dealing with the shares brought forward. In both these cases, the court had specifically dealt with the cases of income from dividends and carry forward of losses which were permitted to be set-off against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome from security in which it had invested, was permissible. Even in the case of Western States Trading Co. P. Ltd. v. CIT [1971] 80 ITR 21, the Supreme Court was concerned with the question whether the appellant which owned a colliery and entered into an agreement to sell the colliery to another company with effect from September, 1954, pending completion of sale, the business was being carried on on behalf of the purchaser company since the price fixed less than the book value of the assets, the appellant claimed a balancing allowance under section 10(2)(vii) of the Act for the assessment year 1956-57. For part of the year, apparently, the assessee had carried on business, while for the remaining part, it has not carried on business. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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