9911796707
TMI Blog1979 (3) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 1960, respectively. The facts found and/or admitted are shortly as follows : The assessee being a company in which public are not substantially interested came within the mischief of the provisions of s. 23A of the Indian I.T. Act, 1922. In the previous years relevant to the said assessment years the assessee had earned income from shares in other companies held by it and from interest on deposits made out of its surplus funds with Messrs. Soorajmull Nagarmull and Howrah Trading Co. (P.) Ltd. its allied concerns. Out of its distributable surplus the assessee declared dividends of more than 70% in the year 1958 and more than 65% in the years 1959 and 1960. The ITO issued notices under s. 23A of the India I.T. Act, 1922, to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er hand that cl. 31 of the objects clause in its memorandum of association authorised the assessee to make investment of its surplus money. Balance-sheets of the assessee for the relevant years were also relied on to show that the deposits of the assessee with its said allied concerns were out of its surplus funds and in the nature of investments. It was contended that the assessee was a company whose business consisted of, wholly or mainly, in the dealing in or holding of investments and the dividends declared by the assessee being short of the statutory percentage, additional super-tax was leviable on the assessee. The AAC, inter alia, held that the cash deposits in the said two concerns were not investments and the income from the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct the higher statutory percentage fixed under Explanation 2 of section 23A of the Indian Income-tax Act, 1922 ? " At the hearing none appeared on behalf of the assessee. Mr. Ajit Sengupta, learned counsel for the revenue, contended before us that the expression " investment " had a wide connotation and included loans and deposits. In its ordinary meaning and popular sense, money lent or deposited with a view to earn income therefrom is described as money invested in loans or deposits. One of the objects of the assessee in its memorandum of association was to invest and deal with its surplus moneys not immediately required, in pursuance of which the assessee had deposited its surplus funds with its allied concerns on a regular basis to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given a restricted or technical meaning but should be understood in its popular sense. (c) Charmugaria Trading Co. Ltd. v. CIT [1977] 110 ITR 715 (Cal). This decision was cited for the following observation of this Court : " Before a company can be stated to be an investment company falling within the mischief of section 109(ii) of the Income-tax Act, 1961, the following have to be found as a fact : (a) That the assessee is carrying on a business, i.e., it is carrying on a systematic or an organised activity with the set purpose, inter alia, of making profits. (b) That the business consists of either dealing in investments, that is, dealings in shares, securities, etc., or holding of investments. (c) That such business is its prim ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
