2015 (4) TMI 554

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....enture stock or securities issued by the Government local authority or other marketable securities of like nature could be termed as any other company as contemplated under Section 73 of the Income Tax Act, 1961." After the appeal was taken up for hearing both the learned counsel suggested that the question formulated at the time of admission should be reframed. After hearing them the question, to be decided, has been reformulated as follows : "Whether in a case where loss resulting out of dealing in shares is more than the income arising out of loans and advances it can be said that the principal business of the assessee is not of granting loans and advances in the light of explanation appended to Section 73 of the Income Tax Act." The ....

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....sessee had earned a sum of Rs. 13.48 lakhs approximately from out of interest on loans and commission and brokerage. Mr. Nizamuddin, learned Advocate appearing for the appellant submitted that the question as to which one is the principal activity of the assessee should depend upon the profits earned during the relevant year. Profits were earned only from the loans and commission and brokerage. There was no profit earned from the dealings in shares. Therefore he submitted that the principal business of the assessee is granting of loans and advances and not dealing in shares. Mr. Poddar, learned Senior Advocate drew our attention to the Explanation appended to Section 73 of the Income Tax Act which reads as follows :- "Explanation: ....