9911796707
TMI Blog2019 (3) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... a loan made to a broker - assessee being a company engaged in the purchase and sale of securities - HELD THAT:- There being no trading activity between the assessee and the broker, it cannot be said to be a trading advance. The advance was made for making investments and after such investments were made what was retained with the broker was levied with interest by the assessee thus giving it the character of a loan. The assessee's intention at the time of advance is not at all relevant, since the character of the amounts retained with the share broker underwent a change, insofar as the levy made for interest. It is also clear that the amount remained with the broker for one year and hence the receipt of ₹ 1,80,000/- as interest on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had engaged a broker to make investments in shares and securities, the assessee being a company engaged in the purchase and sale of securities. The assessee had advanced an amount of ₹ 1,30,00,000/- to the broker for the purpose of making investments on the assessee's behalf in the stock market. The advance was made on 25.10.1990. The broker made investments for the value of ₹ 1,20,00,000/-. There was a balance of ₹ 10,00,000/- remaining with the broker for which the assessee charged interest @ 18%. In the subject assessment year, the assessee obtained interest of ₹ 1,80,000/-, on which the levy was made. 3. The learned Senior Counsel, Government of India (Taxes) would contend that the interest liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roker for making investments in the stock market and there is only a service rendered by the broker through whom alone the assessee could make such investments. There being no trading activity between the assessee and the broker, it cannot be said to be a trading advance. The advance was made for making investments and after such investments were made what was retained with the broker was levied with interest by the assessee thus giving it the character of a loan. The assessee's intention at the time of advance is not at all relevant, since the character of the amounts retained with the share broker underwent a change, insofar as the levy made for interest. It is also clear that the amount remained with the broker for one year and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
