COMMISSIONER OF INCOME TAX Vs. MICRO INDIA LIMITED

JUDGEMENT

(1.) THIS appeal by the Revenue under Section 260a of the Income Tax Act 1961 (in short the Act) is directed against the order passed by the Income Tax Appellate Tribunal, Gauhati Bench dismissing the appeal filed by the Revenue. The appeal has been admitted on the following substantial questions of law:

(2.) THE assessee, which is a company, in the assessment year 1994-1995 claimed loss on sale of shares amounting to Rs. 49,15,930/- and set off the same against the 'interest income', 'dividend income', 'hire charge income' and from 'other income'. The assessing authority in view of the provision contained in Section 73 of the Act has held that loss suffered by the assessee in its share dealings is the speculation loss within the meaning of Section 73 of the Act and hence disallowed the claim of the assessee for set off. In appeal preferred by the assessee before the Commissioner of Income Tax (appeals), Guwahati under Section 143 (3) of the Act, the order of the assessing authority was interfered with on the ground that in view of the explanation to Section 73, loss claimed by the assessee cannot be said to be in respect of the speculation business as the same was in respect of granting advances. In appeal by the Revenue before the Income Tax Appellate Tribunal, Gauhati Bench, same view has been taken by holding that the provision of Section 73 are not applicable to the case of the assessee company. Hence, the present appeal before this Court.

(3.) WE have heard Mr. U. Bhuyan, learned Standing Counsel for the Revenue and Mr. R. Goenka, learned Counsel appearing on behalf of the assessee company.