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TMI Blog1987 (2) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment and claimed the loss as capital loss. The Income-tax Officer, however, held that the assessee was dealer in shares and, accordingly, treated the loss as a business loss. Being aggrieved, the assessee preferred an appeal against the said decision to the Appellate Assistant Commissioner. Following the decision of the Tribunal in the case of the assessee in earlier years, the Appellate Assistant Commissioner held that the assessee was holding the shares by way of investment and that there was nothing to show that the assessee dealt in shares in the said assessment year by way of business. The Appellate Assistant Commissioner held that the loss was a capital loss. Being aggrieved, the Revenue preferred an appeal before the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee as the beneficial owner of the said shares. The assessee preferred an appeal against the said assessment before the Appellate Assistant Commissioner. It was held by the Appellate Assistant Commissioner that it was established that the assessee was the beneficial owner of the shares and had obtained loans against them through brokers. He held that the assessee had substantially complied with the provisions of the relevant rules and was entitled to the credit of tax deducted at source in respect of such dividends. Being aggrieved, the Revenue came up in appeal from the decision of the Appellate Assistant Commissioner to the Income-tax Appellate Tribunal. It was contended on behalf of the Revenue before the Tribunal that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... questions of law arising out of the order of the Tribunal, for the opinion of this court : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal misdirected itself in law in holding that the assessee did not carry on a business or an adventure in the nature of trade in dealing in shares ? 2. Whether, on the facts and in the circumstances of the case, and on a correct interpretation of rule 30A, the Tribunal was correct in holding that the assessee was entitled to the benefit of the credit of the tax deducted at source from the dividend in respect of the shares held by the banks ?" At the hearing before us, learned advocate for the Revenue contended in respect of question No. 1 that the transactions on which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue to impugn the transactions in view of the question referred. The only question before this court was whether the transactions were a business deal in shares or whether the transactions were only a sale of investments. Learned advocate submitted that the case of the Revenue in the proceedings below was that the assessee was a dealer in shares and not an investor and, therefore, the loss Should have been held to be a business loss and not a capital loss. The contentions of the learned advocate for the assessee are of substance and we accept the same. It appears to us that an identical question had come up before the Tribunal in the case of the assessee in earlier years and it had been held that the assessee was an investor and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to a decision of the Andhra Pradesh High Court in CIT v. Smt. Batool Begum [1976] 104 ITR 642. In that case, a Division Bench of the Andhra Pradesh High Court held that the assessee who was not the registered shareholder was not in a position to file a declaration in Form No. 15B required under rule 30A of the Income-tax Rules, 1962 it was also held that such an assessee was not entitled to the benefit of credit of tax deduction made at source on the dividend income received by her from companies on the shares held by the trust in terms of rule 30A of the Rules. Learned advocate for the assessee contended to the contrary and drew our attention to the relevant provisions of the Income-tax Act, 1961, which are noted hereinafter. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of security for the repayment of any loan or the performance of any obligation and such shares are held by, or on behalf of, any of the following, namely:- . ...... (d) any banking company, including a co-operative bank or land mortgage bank. " Learned advocate for the assessee submitted that section 199 of the Income-tax Act, 1961, had been amended with retrospective effect by the Finance Act, 1968. Learned advocate for the assessee submitted further that the Andhra Pradesh High Court did not consider the effect of the retrospective amendment introduced in section 199 of the Income-tax Act, 1961, in Smt. Batool Begum [1976] 104 ITR 642 (AP), which has been relied on by the Revenue. On the facts as found, it appears to us that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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