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TMI Blog2005 (1) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in this case, is made up of. The assessee-company has earned a profit of Rs. 2,83,29,053 from its business of trading in steel, yarn and fabrics and from service charges. The assessee-company has also incurred a loss of Rs. 2,84,26,411 in the purchase and sale of shares. Altogether, the income from business is a loss of Rs. 97,358. The assessee-company has further earned dividend income of Rs. 10,18,914 from shares held as its stock-in-trade. The loss of Rs. 97,358 has been computed under the head profits and gains of business or profession . The dividend income of Rs. 10,18,914 has been computed under the head income from other sources . After the set off of the dividend income and the business loss, the gross total income has been worked out to Rs. 9,21,556 which is entirely made up of dividend income computed under the head income from other sources . Section 56(2)(i) mandates that dividends shall be chargeable to income-tax under the head income from other sources . The nature and composition of gross total income for the purpose of Explanation to section 73 need to be examined on the basis whether the main chunk of the gross total income is made up of income chargeabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable in the assessee company and thereby further erred in directing to allow the set off of losses incurred in the business of purchase and sale of shares against the other income. The said view is well supported by the decided case by Hon'ble Calcutta High Court in the case of Eastern Aviation & Industries Ltd. v. CIT reported at 208 ITR 1023." 2. When the Court was assembled, Shri K.C. Naredi, the learned Commissioner of Income-tax (Departmental Representative) sought the attention of the Bench to the adjournment application moved by the Revenue. The Revenue has sought adjournment of the hearing for the reason that the Special Counsel engaged by the Department to conduct its case, Shri Beni M. Chattergi has informed his inability to appear in the Court for this case and the appointment of another Counsel is in the process. The learned CIT (D.R.) has produced a copy of the communication that he has received from Shri M.G. Zade, Income-tax Officer, 3(1)(3), Mumbai, to support the adjournment motion. 3. The Bench after considering the submissions, expressed its constraints in adjourning Special Bench Cases posted for hearing after a long process of administrative procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to section 43(5) which provided an exception to speculative transaction, if the contract of sale was made to guard against loss in shareholding through price fluctuations. (7) The Assessing Officer did not accept the objections made by the assessee-company. He held that the provisions of section 43(5) do not have application in this case as the present case is governed by Explanation to section 73 which is an independent and deeming provision. (8) The assessee-company defended its case under Explanation to section 73 also. The assessee-company contended that its gross total income consisted mainly of income which is chargeable under the head "income from other sources" and therefore the exclusion provided in the Explanation applied to it. (9) The claim of the assessee-company regarding non-applicability of Explanation to section 73 also was rejected by the Assessing Officer on the following grounds:- (i) Explanation to section 73 stated that where the assessee-company has more than one business activities, one of which is buying and selling of shares, shall be treated as speculative business; the view supported by the decision of CIT v. Arvind Investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch exclusion for the loss incurred by the assessee-company in dealing shares from the gross total income either under section 73. It was necessary to determine the gross total income without applying the provisions of Explanation to section 73 and on that basis if the gross total income consisted wholly of dividend: income which is chargeable under the head "income from other sources" then, the loss incurred by the assessee-company on purchase and sale of shares would not be speculative in nature within the meaning of Explanation to section 73. (vi) Reliance was placed by the assessee-company on the following decisions:- (a) Rajan Enterprises (P.) Ltd. v. ITO [1992] 41 ITD 469 (Bom.) (b) M. Gulab Singh & Sons (P.) Ltd. v. IAC [1992] 43 ITD 308 (Chd.). (12) The CIT(A) accepted the second limb of the contention advanced by the assessee-company and held as follows:- "I agree with the submissions made on behalf of the appellant that the Assessing Officer could not invoke the provisions of section 73 and Explanation thereto without adjusting the losses and gains from various sources under the head 'business' as permitted by the provisions of sections 70 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os. 1430 & 1431 (Bom.) of 1992, dated 31-3-1993] (v) Rajan Enterprises (P.) Ltd. v. ITO [1992] 41 ITD 469 (Bom.). 7. On the other hand, in the following decisions, the Tribunal has taken the view that while examining the applicability of Explanation to section 73, the entire business activities of the assessee-company need to be considered and not the composition of the gross total income alone. (i) ITO v. Srichakra Textiles (P.) Ltd. [IT Appeal No. 6640 (Bom.) of 1992, dated 31-5-2001] (ii) Usha Distributors (P.) Ltd. [IT Appeal Nos, 940 & 491 (Bom.) of 2001 (SMC)] (iii) Prudential Construction Co. Ltd. v. Asstt. CIT [2000] 75 ITD 338 (Hyd.) (iv) Merfin (India) Ltd. v. Dy. CIT [2002] 80 ITD 399 (Hyd.) (v) Off-shore India Ltd. v. ITO [1986] 15 ITD 549 (Cal.) 8. Therefore, at the instance of Revenue, the matter was placed before the Hon'ble President of the Income-tax Appellate Tribunal, who has constituted the Special Bench to deliver upon the issue raised in appeal by the Revenue. 9. Shri K.C. Naredi, the learned CIT (DR) who appeared for the Revenue, argued his case at length. The contentions and Arguments advanced by Shri Naredi are in the following lines:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r business income of the assessee-company was much higher than its income from other sources and therefore, the assessee-company could not claim immunity from Explanation to section 73 of the Act. (6) The above composition of assessee's income is the correct state of affairs. The positive income earned from the principal business carried on by the assessee-company was reduced to a loss only because of the share trading loss was set off against it. The real composition of assessee's income need to be looked into before such set off. (7) That the Courts have held in the following cases that the test to be applied to ascertain the nature of activities carried on by a company is to examine the principal/primary/fundamental business carried on by it and not to examine the composition of gross total income on a year to year basis. Relied on the following decisions: (i) CIT v. Amritlal & Co. Ltd. [1995] 212 ITR 540 (Bom.) "Section 109 of the Income-tax Act, 1961, defines the expression "investment company" for purposes of sections 104, 105 and 107A. From the definition it is evident that in order to term a company an "investment company", its gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d "other sources" could not be held higher than "business income". This is because, the shares were held by the assessee-company as its stock-in-trade and dividends on those shares would form part of the income from the business of the assessee. In that case, the dividends of Rs. 10,18,914 declared by the assessee under the head "other sources" need to be considered as its business income in which case the business income of the assessee-company would be more than the income under any of the heads mentioned in the exclusion to Explanation to section 73; rather there would be no income under any other heads, than business income. (9) Reliance placed on the following decisions:- (i) Western States Trading Co. (P.) Ltd. v. CIT [1971] 80 ITR 21 (SC). "If shares are held by an assessee as part of his trading assets, dividends on those shares would for part of the income from business of the assessee. The assessee will therefore be entitled to claim set off of loss from its business carried forward from earlier years against dividends of the current year from the shares held as stock-in-trade of his business under section 24(2) of the Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive income. The share trading loss of the assessee-company was Rs. 2,84,26,411 as against dividend income of Rs. 10,18,914. The business income in the form of negative income was definitely more than the income from other sources by way of dividends and the assessee-company cannot claim that it is excluded from Explanation to section 73 on the ground that its gross total income mainly consisted of income from other sources. (11) Reliance placed on the following decisions:- (i) Eastern Aviation & Industries Ltd. v. CIT [1994] 208 ITR 1023 (Cal.) "The expression "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 of the Income-tax Act, 1961, reads as under. "Explanation": Where any part of the business of a company (other than a company whose gross total income consists mainly of income which is chargeable under the heads "Interest on securities", "Income from house property", " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjusted against business income." (13) That the Tribunal has applied the ratio laid down by the Jurisdictional High Court in CIT v. Amritalal & Co. Ltd. [1995] 212 ITR 540 (Bom.) that to arrive at the conclusion whether a company is an investment company or not, the decisive factor is the nature of the activities of the company which gives rise to the income and not the actual income from such activities during a particular assessment year. The above decision was followed by the Tribunal as the circumstances in which the company was to be treated as an investment company and circumstances in which a company is excluded from Explanation to section 73 are identically stated in section 109 (since repealed) and in section 73 of the Income-tax Act, 1961. (14) That the Tribunal has also relied on the judgment in Western States Trading Co. (P.) Ltd. v. CIT [1971] 80 ITR 21 (SC) to hold that dividends received on shares held as stock-in-trade has to be treated as business income. The Tribunal has held as under:- "Applying the ratio laid down by Hon'ble Apex Court in the case of Western States Holding Co. (P.) Ltd., dividend income is to be assessed under the head inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Navnitlal Ambalal v. CIT [1976] 105 ITR 735 (Bom.), CIT v. New India Investment Corpn. Ltd. [1994] 205 ITR 618 (Cal.) and Merfin (India) Ltd. v. Dy. CIT [2002] 80 ITD 399 (Hyd.) relied on by the learned Commissioner have no application in this case. 13. The detailed contentions and arguments made by Shri J.D. Mistry are briefly stated as under:- (1) That the assessee-company is carrying on various business like trading in Steel, Yarn, Fabrics and also in shares in addition to rendering of commercial services. The income/loss of the different business have to be considered together under the head "profits and gains of business or profession". (2) That the normal presumption is that loss of any one business has to be set off against the income of other business, all coming under the same head of business income. The above presumption is the substance of law stated in section 70. The Revenue has not pointed out any provision of law in the Income-tax Act which does not support the above presumption regarding intra-head set off of income/loss arising out of different business carried on by an assessee. The assessee-company has set off its share trading loss against inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusive, each specific head covering items of income arising from a particular source, On that reasoning, the Court held that even though the securities were part of the trading assets of the assessee-company doing business, the income therefrom had to be assessed as "interest on securities" under section 8 of that Act. The said decision was followed by the Supreme Court in its later decision in the case of CIT v. Cocanada Radhaswami Bank Ltd. [1965] 57 ITR 306. (8) That in the light of the legal position explained above, the contention of the Revenue that dividends earned by the assessee-company from the shares held by it as stock-in-trade should be considered as "business income" rather than "income from other sources" is not sustainable in law. The reliance placed by the Revenue on the Supreme Court decisions in Western States Trading Co. (P.) Ltd. v. CIT [1971] 80 ITR 21 and Appollo Tyres Ltd. v. CIT [2002] 255 ITR 273 is out of context. (9) That the contention of the Revenue regarding business loss being in the nature of negative income should have been compared to the positive income from other sources is not applicable to the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property, capital gains and income from other sources". That is, the Explanation to section 73 would apply to a company only if its gross total income mainly consisted of business income. The deeming provision does not lay down any other test to identify a company covered by Explanation to section 73, other than the test of "gross total income". (12) That while examining the composition of the gross total income, the Revenue is trying to identify the principal business carried on by the assessee, as its main source of income. The inquiry regarding "source of income" is relevant in identifying the principal business of an assessee. In computing gross total income, what is relevant is "heads of income". That there should not be any confusion between "source of income and heads of income". In the context of Explanation to section 73 which is based on the concept of gross total income, the relevant factor to be looked into is "heads of income". (13) That the argument of the Revenue that the test to be applied to ascertain the nature of activity carried on by a company is to examine the principal business carried on by it and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bom.) of 1992, dated 28-6-1993] (7) Sanket Commercials Ltd. v. Dy. CIT [IT Appeal No. 8592 (Bom.) of 1992, dated 23-9-1993] (8) Scotline Trading Ltd. v. Asstt. CIT [IT Appeal No. 2156 (Bom.) of 1992, dated 12-10-1993] (9) Rajniketan Traders Ltd. v. Asstt. CIT [IT Appeal No. 4618 (Bom.) of 1993, dated 18-8-1994] (10) Asstt. CIT v. Vision Trading Co. (P.) Ltd. [IT Appeal Nos. 3359 & 3360 (Bom.) of 1992, dated 14-9-1998] (11) Manor Trading Ltd. v. Asstt. CIT [IT Appeal No. 768 (Bom.) of 1992, dated 26-2-1999] (12) Santoor Commercials Ltd. v. Asstt. CIT [IT Appeal No. 435 (Bom.) of 1972, dated 28-12-1998] (13) Asstt. CIT v. Crator Trading Enterprises Ltd. [IT Appeal No. 8927 (Bom.) of 1992, dated 22-9-1998] (14) Asstt. CIT v. Madona Commercial (P.) Ltd. [IT Appeal No. 9558 (Bom.) of 1991, dated 17-9-1998] (15) Mansi Trading (P.) Ltd v. Asstt. CIT [IT Appeal No. 2331 (Bom.) of 1991, dated 3-8-1998] (16) Dy. CIT v. Bloom Trading Co. (P.) Ltd. [IT Appeal No. 6629 (Bom.) of 1991, dated 27-4-1996] (17) Vision Trading Co. (P.) Ltd. v. Asstt. CIT [IT Appeal No. 2914 (Bom.) of 1990, dated 11-12-1997] (18) Asstt. CIT (Inv.) v. Hero Textiles & Trading Ltd. [IT Appeal No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. was considered in the cases of Dy. CIT v. Pams Investments & Trading Co. (P.) Ltd. [IT Appeal No. 7789 (Bom.) of 1992, dated 5-7-2002] and Dy. CIT v. Radiant Texfabs Ltd. [IT Appeal No. 6947 (Bom.) of 1994, dated 21-11-2002]. (20) The decision of Andhra Pradesh High Court cited by the Revenue in Nav Bharat Enterprises (P.) Ltd. v. CIT [1983] 143 ITR 804 was considered by the Tribunal in the decisions of Sitcon Commercials (P.) Ltd. v. Asstt. CIT [IT Appeal No. 8036 (Bom.) of 1992, dated 30-3-1993], Contony Trading Enterprises Ltd. v. Asstt. CIT [IT Appeal Nos. 1430 & 1431 (Bom.) of 1992, dated 31-3-1993], Adamson Commercials Ltd v. Dy. CIT [IT Appeal No. 8582 (Bom.) of 1992, dated 8-6-1993], Sanket Commercials Ltd. v. Dy. CIT [IT Appeal No. 8592 (Bom.) of 1992, dated 23-9-1993], Rajniketan Traders Ltd. v. Asstt. CIT [IT Appeal No. 4618 (Bom.) of 1993, dated 18-8-1994]. (21) The decision of the Calcutta High Court in Eastern Aviation & Industries Ltd. v. CIT [1994] 208 ITR 1023 was considered by the Tribunal in its decisions rendered in Santoor Commercials Ltd. v. Asstt. CIT [IT Appeal No. 435 (Bom.) of 1972, dated 28-12-1998] and Utkarsh Textiles Trading Ltd. v. Asstt. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Commissioner (DR) at the time of hearing do not have any direct bearing on the issue to be decided in this case. (i) Sri Ranga Vilas Ginning & Oil Mills v. CIT [1982] 133 ITR 85 (Mad.) (ii) CIT v. Puttaiah Seshaiah & Co. [1984] 146 ITR 168 (AP) (iii) Navnitlal Ambalal v. CIT [1976] 105 ITR 735 (Bom.) (iv) CIT v. New India Investment Corpn. Ltd. [1994] 205 ITR 618 (Cal.) (v) Merfin (India) Ltd. v. Dy. CIT [2002] 80 ITD 399 (Hyd.). 17. A speculative transaction and the loss arising out of a speculative transaction have been highlighted in the scheme of Income-tax Act, 1961, more particularly in the context of computation of income under the head "Profits and gains of business or profession", for the purpose of restricting the scope of setting off and carry forward of such loss. The law, for that matter, treats speculative transaction carried on by an assessee as a distinct and separate business if the nature of such transactions arc such that, it constitutes a business. This is provided under Explanation 2 to section 28 of the Act. Likewise the definition of the term speculative transaction is provided in section 43(5) in a substantive manner. Generally speak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t; and "income from other sources". The second exception is in the case of a company whose principal business is the business of banking or the granting of loans and advances. 22. The first category of exception is identified by the composition of its gross total income. The words used in the statute [..... other than a company whose gross total income consists mainly of income which is chargeable under the head "interest on securities", "income from house property", "capital gains" and "income from other sources"] provide thrust on the composition of the gross total income of that company. If the gross total income of the company mainly consists of income falling under the above-mentioned heads, Explanation to section 73 does not apply. If the gross total income of the company is mainly made up of income under the head "profits and gains of business or profession", it is caught by the mischief of Explanation to section 73. Therefore, we have to sec that the first category of exception is made on the basis of the "character of its gross total income". 23. As far as the second category of exception is concerned, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging from 25 per cent to 50 per cent depending upon the nature of the company. The companies were classified under three heads viz. investment company, trading company and any other company, for the purpose of section 104. If the company was an investment company, the rate of tax was 50 per cent. If the company was a trading company, the rate was 35 per cent. If the company was any other company, the rate was 25 per cent. The examination made by the Court in that case, therefore, was whether the assessee-company could be treated as an investment company for the purpose of levying tax at 50 per cent. In that case, the income of the assessee-company right from assessment years 1951-52 to 1977-78 showed that assessee's income from business always far exceeded its non-business income. It was only in the case of four assessment years 1968-69, 1969-70, 1971-72 and 1972-73 that other income exceeded the business income of the assessee. In a period of 27 years, only in the case of four assessment years that the business income of that assessee-company fell short of 50 per cent of its gross total income. For all other assessment years the business income far exceeded the income from oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts total income. In that case the Court was infact examining the basic character of the activities carried on by the company even though there may be seasonal changes in the composition of its total income. The Rule laid down by the Court is that the ups and downs in various heads of income in certain assessment years should not go to determine the fundamental character of a company. A useful extract from the judgment as found in pages 812 and 813 is extracted below:- "We are of the opinion that the construction placed by the Central Board of Direct Taxes upon the definition represents the correct view. Adopting the view contended for by the Department would result in anomalous and inequitable results. Take the case of a company which is engaged in generation of electricity. Its investment in that behalf is ten crores of rupees. It also engages itself in trading activities, which is not one of the specified activities. The investment in trading activities is, say, 50 lakhs of rupees. Suppose in a given assessment year, its income from generation of electricity is 'nil' while its income from trading activities is one lakh of rupees. According to the Department's c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present case is the test of "gross total income", we have to examine how the gross total income of the assessee in this case, is made up of. The assessee-company has earned a profit of Rs. 2,83,29,053 from its business of trading in steel, yarn and fabrics and from service charges. The assessee-company has also incurred a loss of Rs. 2,84,26,411 in the purchase and sale of shares. Altogether, the income from business is a loss of Rs. 97,358. The assessee-company has further earned dividend income of Rs. 10,18,914 from shares held as its stock-in-trade. The loss of Rs. 97,358 has been computed under the head "profits and gains of business or profession". The dividend income of Rs. 10,18,914 has been computed under the head "income from other sources". After the set off of the dividend income and the business loss, the gross total income has been worked out to Rs. 9,21,556 which is entirely made up of dividend income computed under the head "income from other sources". 32. In the present case, the gross total income is made up of dividend income chargeable to tax under the head "income from other sources". The character of gros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k Ltd. v. CIT [1957] 32 ITR 688 that heads of income are mutually exclusive and income falling under one head must be assessed under that head only; assessee and Revenue have no option. Therefore, the Court held that the head of income of which the source is "interest on securities" has its characteristics for income-tax purposes and falls under the specific head covered by section 8 of the 1922 Act, and where an item falls specifically under one head, it has to be charged under that head and no other. Accordingly, the Court held in that case that income from "interest on securities" would fall under section 8 of the 1922 Act even though securities were held by a banker as part of its trading assets in the course of business, and such income cannot be brought to tax as business income. 34. Following the above principles, the Supreme Court has held in CIT v. Chugandas & Co. [1965] 55 ITR 17 that even if an item of income is earned in the course of carrying on a business, it will not necessarily fall within the heading "profits and gains of business". If securities constitute stock-in-trade of the business of an assessee, interest received from those se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany from the shares held as its stock-in-trade is "chargeable" under the head "other sources" is to be examined in the light of the rule regarding classification of income under different heads for computing the total income. As classification of income under specified head is important in computing the total income which is the basis of charge of income-tax, the provisions and rules relating to classification and computation of income have to be strictly construed in the light of the Supreme Court decisions considered above including the decisions in United Commercial Bank Ltd. v. CIT [1957] 32 ITR 688 (SC) and CIT v. Cocanada Radhaswami Bank Ltd. [1965] 57 ITR 306 (SC), relied on by the assessee's Counsel. 37. The examination leads us to the provisions contained in section 56 of the Income-tax Act, 1961. Section 56(2)(i) mandates that "dividends" shall be chargeable to income-tax under the head "income from other sources". The nature and composition of gross total income for the purpose of Explanation to section 73 need to be examined on the basis whether the main chunk of the gross total income is made up of income "chargeable& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and setting off the same against the profits or gains of the assessee from the business in the subsequent year or years. It was emphasized in the aforesaid decision that subjection (2) of section 24 in contradistinction to sub-section (1) is concerned only with the business and not with its heads under section 6 of the Act. Dividends are included in the meaning of income under sub-section (1A) of section 12 which is the residuary head. Applying the principles adverted to before, the amount of dividends would form a part of the income from the business of the assessee if the shares were a part of the assessee's trading assets and the assessee would be entitled to a set-off as claimed against the loss from its business incurred during the previous year...." 40. In the above case, the Supreme Court has only reiterated the principles laid down by the Court in CIT v. Cocanada Radhaswami Bank Ltd. [1965] 57 ITR 306. In CIT v. Cocanada Radhaswami Bank Ltd. [1965] 57 ITR 306, the Supreme Court has held that the scheme of the Act is that income tax is one tax. Section 6 of the 1922 Act (corresponding to section 14 of the 1961 Act) only classifies the taxable income under differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT [2002] 255 ITR 273, the Supreme Court was examining whether dividend income earned by the assessee-company from its investments made in the units of Unit Trust of India could be considered as "income derived from an eligible business". This examination was made for the purpose of section 32AB of the Income-tax Act. The Supreme Court held that the Tribunal has already made a finding of fact that the units were held by the company as its business stock and investing in units was one of the business activities of the assessee-company. The Court examined the de facto nature of unit dividends in the hands of the assessee-company in the context of section 32AB and held that it would be income derived from business. In that case also; the Court has not held that dividend income is chargeable under the head "profits and gains of business or profession". 44. The Supreme Court in the cases of Western States Trading Co. (P.) Ltd. and Apollo Tyres Ltd. has not reconsidered the principles laid down in the earlier decisions of United Commercial Bank Ltd.'s case and Cocanada Radhaswami Bank Ltd.'s case regarding the classification and computation of income und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in assessee's case, need to be examined by treating the business loss as the negative income of the assessee has to be considered next. The Revenue has relied on decisions of Calcutta High Court in Eastern Aviation & Industries Ltd. v. CIT [1994] 208 ITR 1023 and Aryasthan Corpn. Ltd. v. CIT [2002] 253 ITR 401. 48. In the case of Eastern Aviation & Industries Ltd. v. CIT [1994] 208 ITR 1023 (Cal.), the assessee had a share trading loss of Rs. 12,90,145 and a speculation loss of Rs. 7,95,447. The positive income from other sources was Rs. 3,87,603. In Aryasthan Corpn. Ltd. v. CIT [2002] 253 ITR 401 (Cal.) also, the facts were identical where the business loss was higher than positive income from other sources. But in assessee's case, dividend income is higher than the business loss. Income from other sources by way of dividend was Rs. 10,18,914 whereas income from business was a loss of Rs. 97,358. Even when business loss is treated as negative profit, the negative profit was less than the positive income from dividends. Therefore, on the facts of the present case, the above two decisions of the Calcutta High Court are not applicable to issue. 49. The Revenue has al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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