1993 (7) TMI 41

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..... ound by the Tribunal are as under: The assessee is a limited company and derives income from share dealings and dividend. The assessee during the year under reference disclosed share loss of Rs. 12,90,145 for which delivery was taken by it. The speculation loss in shares was shown at Rs. 7,95,447. The Income-tax Officer discussed the nature of the business of the assessee and indicated that it was a dealer in shares and it was not an investor. He, accordingly, came to the conclusion that the business loss shown by the assessee at Rs. 12,90,145 could be taken as speculative loss in view of the Explanation to section 73 of the Income-tax Act, 1961. The assessee went in appeal before the Commissioner of Income-tax (Appeals) and contended tha .....

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..... total income of the assessee in this case mainly consisted of income chargeable under the head "Income from other sources" and, accordingly, the assessee should be treated as an "investment company" within the meaning of section 109(ii) of the Income-tax Act, 1961. The expression "investment company" has been defined in section 109(ii) of the said Act as under: " 'investment company' means a company whose gross total income consists mainly of income which is chargeable under the heads 'Interest on securities', 'Income from house property', 'Capital gains' and 'Income from other sources'." Further, the Explanation to section 73 reads as under: "Explanation.-Where any part of the business of a company (other than a company whose gross tot .....

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..... ,21,400. As against the above, the only income of the assessee-company for the year under reference was by way of dividend amounting to Rs. 3,87,603. If the total income of this assessee-company is computed in accordance with the provisions of the Income-tax Act, 1961, without first giving effect to the Explanation to section 73, it would be found that as against the income by way of dividend amounting to Rs. 3,87,603 assessable under the head "Income from other sources", it had a net business loss in its share dealing transactions aggregating Rs. 21,11,545. In addition thereto, it had a speculative loss in share transaction amounting to Rs. 7,95,447 which, in any event, is to be carried forward in view of the provisions of section 73 of th .....

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