2006 (4) TMI 112

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....at it had earned a business income of Rs. 14,36,077 but had showed set off of the said income of Rs. 14,36,077 against the losses brought forward from the previous years and after such set off had declared a business loss of Rs. 11,87,397. By order dated October 23, 1998, the Assessing Officer held that for the assessment year 1994-95 the income of the assessee from purchase and sale of debentures and shares had been held to be income from other sources and hence, no set off was allowed against the so called loss carried forward from the previous years. Against the said order of assessment, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) and by order dated March 26, 1999, the Commissioner of Income-tax (Appeals)....

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....nal in I. T. A. No. 569/Ind/99 for the assessment year 1994-95 which has been followed by the Tribunal in the impugned order for the assessment year 1996-97 that the Tribunal has given the following reasons for coming to the conclusion that the income or loss of the assessee out of the transactions of shares and debentures is to be treated as income or loss from business and not as income or loss from other sources. "(5) We have considered the rival submissions carefully and have also gone through the relevant materials on record and judgments cited by the parties, we agree with the contention of the learned authorised representative that for determination of the nature of the business of assessee-company the main objects of the memorandum....

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...., the company shall not carry on the business of banking as defined under the Banking Regulation Act, 1949.' " 6. From these objects it becomes clear that the assessee-company is an investment company. This also becomes clear from the findings of the Assessing Officer and contents of the balance-sheet enclosed at pages 27 to 37. From page 36, we find that the assessee has made investments in public limited companies quoted in various stock exchanges. On page 37, the list of shares of unquoted companies is there. This means the assessee has invested in public limited company as well as private limited companies, though the Assessing Officer was right in observing that the main investment is in private limited companies. The hon'ble Supreme ....