TaxTMI 
TaxTMI 
2011 (10) TMI 663
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....ained that the income of the assessee mainly consisted of dividend, profit on sale of investment and other income and therefore the provisions of Explanation to section 73 were not applicable. The details of income was given by the assessee as under : i) Dividend Rs. 23,47,650 ii) Profit on sale of investment Rs. 85,38,736 iii) Misc. income Rs. 22,898 Total : Rs. 1,09,09,284 2.1 The A.O. did not accept the explanation given by the assessee. It was observed by him that total turnover in purchase and sale of shares of the assessee was Rs. 9.37 Crores and therefore the main activity of the assessee was trading in shares and A.O. thus concluded that the provisions of Explanation to section 73 were applicable in the case of assessee. The A.O. further observed that the assessee had incurred total general expenses of Rs. 5,85,248. He attributed such expenses to trading of shares in the ratio of trading turnover to total receipts of business (Rs.14.71 Crores) which came to Rs. 3,72,671. He, therefore computed the loss from trading of shares at Rs. 1,41,56,633 (1,37,83,962 + 3,72,671) which was treated as speculation loss which was set off against speculation profit of Rs. 21,615 and t....
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....ation, the case of company whose gross total income does not consist mainly of income chargeable under the head 'income from house property', 'capital gain' and 'income from other sources' or the principal business of which is not granting loans or advances, if any part of business of the company consists of purchase and sale of shares of other companies, then, such company is deemed to be carrying on speculation business to the extent to which the business consists of purchase and sale of shares. In this case, the assessee had loss from purchase and sale of shares of Rs. 1,41,34,958. The assessee also had income from capital gain and other sources totaling to Rs. 70,06,755. It is a settled legal position that loss is also negative income and therefore while considering the gross total income loss has to be considered in absolute figure. The income from share trading (in absolute figure) included in gross total income is more than income from capital gain and other sources. Therefore the provisions of Explanation to section 73 will be applicable in this case. This view is supported by the judgment of Hon'ble High Court of Calcutta in case of Park View Properties Pvt. Ltd. (supra) a....
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....eated as per the original assessment order. Aggrieved by said decision, the assessee is in appeal before the Tribunal. 3.1 Before us, the learned A.R. for the assessee submitted that the issue was covered in favour of the assessee by the Circular No.334 Dt.3.4.1984 of CBDT in which it has been held that when the Tribunal restored the issue to the file of A.O., interest cannot be levied from the date of original assessment order. It was also argued that the judgments relied upon by the CIT(A) were distinguishable and not applicable to the facts of the present case. The learned D.R. placed reliance on the order of CIT(A). 3.2 We have perused the records and considered the rival contentions carefully. The dispute is regarding levy of interest u/s. 220(2) of the Income Tax Act, 1961. Under the said section, interest at a specified rate is chargeable in case the demand raised on the assessee as per the demand notice is not paid within the time allowed in the notice. The issue raised in this ground is as to when the original assessment has been set aside by Tribunal and fresh assessment has been made by the A.O., the period for levy of interest u/s.220(2) should be reckoned fr....
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....her appeal, the Tribunal set aside the order of CIT(A) and the issue restored to the Assessing Officer. Therefore in terms of the Circular of CBDT (supra), the interest under section 220(2) has to be charged only in respect of demand raised as per the fresh assessment order. The CIT(A) following certain judgments has held that interest under section 220(2) has to be levied from date of default of demand notice issued as per the original assessment order. We have perused the judgments cited by CIT(A) and the same are found to be distinguishable. In case of Pitamber Das Duli (supra), Hon'ble High Court of Madhya Pradesh has held that in case the order of CIT(A) is set aside and the order of Assessing Officer is restored, then, the demand raised on the basis of original assessment order will get revived and the assessee is liable to pay interest on that demand from the date of original order. Obviously, the case is not applicable to the present situation as the assessment order in this case has not been restored by the Tribunal but the matter has been sent back to the Assessing Officer for fresh assessment and therefore the demand in terms of the circular of CBDT has to be levie....