G.M.Holdings (P) Ltd., Kolkata V. Income Tax Officer, Ward-7(4), Kolkata, Kolkata

ITA 2736/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4208 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 25-10-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 09-12-2013
• Court: TRIBUNAL
• Department Lawyers: AMITAVA BHATTACHARYA
• Assessee Lawyers: DILIP KUMAR PATRA
• Keywords: Speculation loss
• Section: 143(3)

Judgement Text

1 ITA NO.2736/KOL/2013 G.M.HOLDING (P) LTD., AY 2006-07 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI S. S. VISWAN ETHRA RAVI, JM] I.T.A NO. 2736/KOL/2013 ASSESSMENT YEAR: 2006-07 G. M. HOLDING (P) LTD. VS. INCOME-TAX OFFICER, WD-7(4), KOLKATA (PAN: AABCG9349L) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 25.10.2016 DATE OF PRONOUNCEMENT: 18.11.2016 FOR THE APPELLANT: SHRI DILIP KUMAR PATRA, AR FOR THE RESPONDENT: SHRI AMITAVA BHATTACHARYA, JCIT ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-VIII, KOLKATA VIDE APPEAL NO. 309/CIT(A)-VIII/KOL/08-09 DATED 18.09.2013. ASS ESSMENT WAS FRAMED BY ITO, WARD- 7(4), KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2006-07 VIDE HIS ORDER DATED 31.12.2008. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA IS JUSTIFIED IN UPHOLDING THE ACTION OF THE LD AO BY TREATING THE L OSS ON ACCOUNT OF SHARES AMOUNTING TO RS. 32,15,349/- AS SPECULATION LOSS AND ALSO UPHOLDING THE ADDITION OF RS. 3,41,408/- AS EXPENDITURE RELATED TO SPECULATION LOSS, IN THE FAC TS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE LD AO OBSERVED THAT THE ASSESSEE HAD SHOWN LOSS FROM SHARE TRADING AT RS. 32,15,350/-. THE A SSESSEE HAD SHOWN PURCHASE OF SHARES WORTH RS. 12,88,76,454/- AND SHOWN SALE OF SHARES F OR RS. 11,77,91,562/- WITH AN INCREASE OF CLOSING STOCK OF RS. 78,69,542/-. SIMULTANEOUSL Y IT HAD ADVANCED LOANS FOR RS. 4,13,21,902/- AS AT 31.3.2006 FROM WHICH IT HAD EAR NED INTEREST INCOME OF RS. 47,49,739/-. THE LD AO ALSO OBSERVED THAT THE ASSESSEE HAD EXPEN DED INTEREST OF RS. 18,41,149/- AS PER PROFIT AND LOSS ACCOUNT. THE LD AO REDUCED THE INT EREST PAID FROM THE INTEREST INCOME AND ARRIVED AT THE NET INTEREST INCOME OF RS. 29,07,590 /-. ACCORDINGLY, THE LD AO CONCLUDED THAT 2 ITA NO.2736/KOL/2013 G.M.HOLDING (P) LTD., AY 2006-07 THE MAIN BUSINESS OF THE ASSESSEE COMPANY CONSISTED OF PURCHASE AND SALE OF SHARES OF OTHER COMPANIES IN COMPARISON WITH THE OTHER ACTIVITIES A ND HELD THAT PROVISIONS OF EXPLANATION TO SECTION 73 OF THE ACT WOULD BECOME APPLICABLE AND T REATED THE LOSS ON ACCOUNT OF PURCHASE AND SALE OF SHARES AS SPECULATION LOSS. 3.1. THE ASSESSEE REPLIED THAT THE ASSESSEE HAD IN CURRED NET LOSS ON ACCOUNT OF SHARE TRADING AT RS. 32,15,349/-. THE ASSESSEE STATED IT IS ENGAGED IN THE PRINCIPAL BUSINESS OF GRANTING LOANS AND ADVANCES AND ACCORDINGLY FALLS U NDER THE EXCEPTION TO EXPLANATION TO SECTION 73 OF THE ACT. FOR THIS PURPOSE, THE POSIT ION OF FUND DEPLOYMENT OF THE COMPANY WAS GIVEN AS UNDER:- SHARE CAPITAL 4,23,40,000 RESERVES & SURPLUS 2,60,59,910 CURRENT LIAB & PROVISIONS 66,74,881 SECURED LOANS 90,93,101 UNSECURED LOANS 75,91,566 --------------------- 9,17,59,458 LESS:CASH & BANK BALANCE 83,00,973 FIXED ASSET 4,60,048 ---------------------- FUND DEPLOYED IN THE BUSINESS 8,29,98,437 ---------------------- FUND DEPLOYED IN THE BUSINESS OF GRANTING LOANS AND ADVANCES RS. 4,13,21,902/- ( 49.79% OF FUND DEPLOYED) FUND DEPLOYED IN THE BUSINESS OF BUYING & SELLING OF SHARES RS. 2,68,89,408/- (3 2.40% OF FUND DEPLOYED) 3.2. THE ASSESSEE ACCORDINGLY PLEADED THAT THE PRI NCIPAL BUSINESS OF THE ASSESSEE IS ONLY GRANTING OF LOANS AND ADVANCES AND ACCORDINGLY WOUL D FALL UNDER THE EXCEPTION TO EXPLANATION TO SECTION 73 OF THE ACT. IT ALSO PLAC ED RELIANCE ON THE SPECIAL BENCH DECISION OF THIS TRIBUNAL IN THE CASE OF DCIT VS VENKATESHWA R INVESTMENT & FINANCE PVT LTD REPORTED IN 93 ITD 177 (KOL) (SB) , WHEREIN IT WAS HELD THAT :- WHAT CONSTITUTES THE PRINCIPAL BUSINESS HAS NOT BE EN DEFINED ANYWHERE IN THE ACT. THEREFORE, WHAT CONSTITUTES PRINCIPAL BUSINESS WILL DEPEND ON OTHER FACTS AND CIRCUMSTANCES OF EACH CASE. THE MEMORANDUM & ARTICLES OF ASSOCIATION OF THE COM PANY, PAST HISTORY OF THE COMPANY, CURRENT DEPLOYMENT OF THE CAPITAL OF THE COMPANY, B REAK UP OF THE INCOME EARNED DURING THE RELEVANT YEAR WILL ALL HELP IN DETERMINING THE PRIN CIPAL BUSINESS OF THE COMPANY. 3 ITA NO.2736/KOL/2013 G.M.HOLDING (P) LTD., AY 2006-07 IT WAS PLEADED THAT AS PER OBJECT CLAUSE OF MEMORAN DUM, THE MAIN BUSINESS OF THE COMPANY IS GRANTING OF LOANS AND ADVANCES. TO FIND OUT THE PAST HISTORY OF THE COMPANY, A CHART WAS FURNISHED FOR 3 PRECEDING YEARS, WHEREIN THE INCOME FROM INTEREST WAS MORE THAN THE INCOME / LOSS FROM SHARE DEALINGS. FURTHER THE FUNDS DEPL OYED IN THE BUSINESS OF GRANTING LOANS AND ADVANCES WAS MORE THAN THE FUNDS DEPLOYED IN BUSINE SS OF BUYING AND SELLING OF SHARES. THE CURRENT YEAR FUND DEPLOYMENT IN GRANTING OF LOANS A ND ADVANCES WAS RS. 4,13,21,902 WHEREAS FUND DEPLOYED IN SHARES BUSINESS WAS RS. 2, 68,89,408/-. SIMILARLY IN THE CURRENT YEAR, THE INTEREST INCOME FROM LOANS AND ADVANCES W AS RS. 47,49,739/- WHEREAS LOSS FROM PURCHASE AND SALE OF SHARES WERE RS. 32,15,349/-. 3.3. THE ASSESSEE PRODUCED THE FOLLOWING CHART :- YEAR ENDED CAPITAL EMPLOYED FUNDS DEPL OYMENT IN GRANTING OF LOANS SHARES BUSINESS AND ADVANCES (RS) (RS) (RS) 31.3.2003 3,35,74,767 1,45,14,177 1,16,96,951 31.3.2004 4,51,18,174 1,96,12,482 32,35,549 31.3.2005 7,25,33,973 3,52,68,516 2,06,68,343 31.3.2007 13,35,56,256 7,94,56,561 1,47, 71,568 31.3.2008 14,88,88,071 9,07,02,750 2,92, 57,251 DETAILS OF INCOME IN VARIOUS YEARS YEAR ENDED TRANSACTIONS FROM DEALING IN SHARES IN TEREST ON LOAN PROFIT LOSS (RS) (RS) (RS) 31.3.2003 NIL 14,80,579 19,32,597 31.3.2004 90,017 24,10,172 24,25,0 81 31.3.2005 1,64,172 25,29,698 33,06,67 3 31.3.2007 40,752 36,39,574 64,42,938 31.3.2008 1,85,538 25,16,432 98,45,97 0 3.4. THE LD AO TRIED TO DEDUCT THE INTEREST PAYMEN T IN THE YEAR UNDER APPEAL AND ARRIVED AT THE NET INTEREST INCOME OF RS. 29,08,591/- AND ACCO RDINGLY STATED THAT THE SAID INTEREST INCOME FROM LOANS AND ADVANCES IS LESS THAN THE ABS OLUTE FIGURE OF LOSS FROM DEALING IN SHARES OF RS. 32,15,349/- AND HENCE THE CASE WOULD FALL UNDER THE EXPLANATION TO SECTION 73 OF THE ACT. 4 ITA NO.2736/KOL/2013 G.M.HOLDING (P) LTD., AY 2006-07 3.5. IN RESPONSE THERETO, THE ASSESSEE STATED THAT THE TOTAL INCOME OF THE ASSESSEE IS AS UNDER:- INTEREST INCOME (NET) 29,08,591 DIVIDEND INCOME 9,87,204 BROKERAGE 14,320 PROFIT ON SALE OF INVESTMENTS 9,10,893 PROFIT FROM SHARE DEALING 18,525 RENT 8,52,150 -------------- 56,91,683 3.6. HENCE IT WAS PLEADED THAT BOTH ON INCOME CRIT ERIA AS WELL AS FUND DEPLOYMENT CRITERIA, THE ASSESSEES CASE WOULD SQUARELY FALL U NDER THE EXCEPTIONS TO EXPLANATION TO SECTION 73 OF THE ACT. THE LD AO HELD THAT SINCE THE FUNDS DEPLOYED IN GRANTING OF LOANS AND ADVANCES WERE LESS THAN 50% THEREON, THE SAD AC TIVITY CANNOT BE CONSTRUED AS PRINCIPAL BUSINESS OF THE ASSESSEE. HENCE THE ASSESSEES PRI NCIPAL BUSINESS IS NOT GRANTING OF LOANS AND ADVANCES AND ACCORDINGLY CONCLUDED THAT THE ASS ESSEES CASE FALLS UNDER THE PURVIEW OF EXPLANATION TO SECTION 73 OF THE ACT AND TREATED TH E LOSS ON SHARES AS SPECULATION LOSS TO THE TUNE OF RS. 32,15,349/-. 3.7. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ALSO REQUESTED TO FURNISH THE DETAILS OF EXPENSES INCURRED IN RELATION TO SHA RE DEALING BUSINESS AND DETAILS OF EXPENSES IN RELATION TO OTHER ACTIVITIES WITH THE REASON FOR CONSIDERING THE SAME WITH SUCH ACTIVITIES. HOWEVER, THE SAME WAS NOT PROVIDED BY THE ASSESSEE. ACCORDINGLY, THE LD AO PROCEEDED TO CALCULATE THE EXPENSES INCURRED FOR SHARE TRADING O N PRO RATA BASIS AND FOUND THAT ASSESSEES SHARE SPECULATION LOSS OF RS. 32,15,349/- WORKS OUT TO 36.1% OF TOTAL INCOME. ASSESSEE HAD INCURRED ADMINISTRATIVE EXPENSES OF RS. 9,45,729/- AND THEREFORE APPLYING 36.1% THEREON WOULD BE THE EXPENDITURE ATTRIBUTABLE TO SHARE DEAL ING BUSINESS WHICH WORKED OUT TO RS 3,41,408/- AND THE SAME WAS DISALLOWED BY THE ASSES SEE AS EXPENDITURE RELATING TO SPECULATION LOSS. 4. THE LD CITA CONFIRMED THE ACTION OF THE LD AO B Y OBSERVING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND SUBMISSION OF THE LD. A/R OF THE APPELLANT HAVING CONSIDERED THE SUBMISSION, I FIND THAT THE FIRST MAIN OBJECT OF THE COMPANY IS TO CARRY OUT BUSINESS OF BUYERS, SELLERS, SUPPLIERS , GROWERS, MANUFACTURER, TRADERS AND DEALING IN SHARES OF COMPUTER. THEREFORE THE BUSINESS OF IN VESTMENT FINANCE HAS BEEN MENTIONED IN CO 5 ITA NO.2736/KOL/2013 G.M.HOLDING (P) LTD., AY 2006-07 2 IN MEMORANDUM & ARTICLE OF ASSOCIATION. KEEPING I N VIEW, THIS FACT, THE TWO CRITERIA ARE IMPORTANT TO DECIDE THE ISSUE. FIRSTLY, TO QUALIFY THE COMPANY AS INVESTMENT COMPANY, THE INCOME OF THE COMPANY FROM ITS INVESTMENT ACTIVITY SHOULD BE MORE THAN 50% OF ITS TOTAL INCOME. SECONDLY, THE DEPLOYMENT OF FUND FOR INVEST MENT FROM WHICH THE COMPANY EARNED INTEREST SHOULD BE MORE THAN 50% OF THE TOTAL FUND AVAILABLE. AS REGARDS, THE APPELLANT'S CONTENTION THAT FOR COMPARISON OF INCOME GROSS INTE REST SHOULD BE CONSIDERED ITS ARGUMENT IS NOT ACCEPTABLE. IT IS SO BECAUSE IF THE CORRESPONDI NG EXPENDITURE IS IGNORED, IT WOULD DISTORT THE FIGURE OF PROFIT AND CORRECT COMPARISON CANNOT BE MADE. THEREFORE, THE A.O. WAS RIGHT IN HOLDING THAT THE NET INTEREST INCOME IS LESS AS COM PARED TO INCOME OF OTHER ACTIVITY OF THE APPELLANT, MAINLY SHARE SPECULATION. IN THIS CASE, THE NET INTEREST INCOME IS RS.29,08,591/- AND SPECULATION LOSS IS RS. 32,15,349/-. AS REGARDS, TH E DEPLOYMENT OF FUNDS INVESTMENTS WERE LESS THAN 50% OF TOTAL FUND AVAILABLE. EVEN IN THE EARLI ER AND SUBSEQUENT YEARS, THE FUNDS DEPLOYED IN GRANTING OF LOAN WERE LESS THAN 50% OF TOTAL AVA ILABLE FUNDS. THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE A.O. WAS RIGHT IN LAW AND FACTS IN INVOKING THE EXPLANATION OF SEC. 73 AND IN DISALLOWING TRADING LOSS ON SALE OF SHARE OF RS.32,15,349 AS SPECULATION LOSS. AS REGARDS, DISALLOWANCE OF EXPENDITURE OF RS.3,41 ,40 8/- , THE APPELLANT HAS NOT PRODUCED ANY EVIDENCE. NO EXPLANATION HAS BEEN GIVEN TO JUSTIFY ITS ALLOWABILITY. HENCE, DISALLOWANCE OF RS.3,41,408/- IS CONFIRMED. HENCE GR. 1 OF APPEAL I S DISMISSED. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- 1) THE LD. CIT (A) HAS UPHELD THE SHARE LOSS OF 3 2,15,349/- AS DEEMED SPECULATION LOSS U/S. 73 OF THE INCOME TAX ACT, 1961 AND ALSO UPHELD THE ADDITION OF RS. 3,41,408/- AS EXPENDITURE RELATED TO DEEMED SPECULATION LOSS. DURING THE YEAR THE COMPANY HAS EARNED INTEREST INCOME FROM GRANTING OF LOANS & ADVANCES AMOUNTING TO RS.4 7,49,739/- WHICH IS MORE THAN THAT OF LOSS ARISING FROM SHARE TRADING (I.E. RS.32,15,349/ -). THE PAST HISTORY OF THE COMPANY ALSO REVEALED THAT THE PRINCIPLE BUSINESS OF THE COMPANY IS THAT OF GRANTING OF LOAN AND ADVANCES. AS THE PRINCIPLE BUSINESS OF THE COMPANY IS GRANTIN G OF LOANS AND ADVANCES HENCE THE COMPANY IS CLEARLY OUT OF PURVIEW OF EXPLANATION TO SECTION 73 OF THE INCOME TAX ACT, 1961, SO THE LD. ASSESSING OFFICER WAS TOTALLY WRONG IN TREA TING THE SHARE TRADING LOSS AS DEEMED SPECULATION LOSS BY INVOKING EXPLANATION TO SECTION 73 OF THE INCOME TAX ACT, 1961. THEREFORE THE LOSS FROM SHARE TRADING BUSINESS SHALL BE SET O FF WITH INTEREST INCOME, AND CONSEQUENTLY ADDITION OF THE EXPENDITURE IN RELATION TO DEEMED S PECULATION LOSS TO THE EXTENT OF RS.3,41,408/- SHOULD ALSO BE DELETED. 6. THE LD AR ARGUED THAT THE FUND DEPLOYED IN LOAN S AND ADVANCES ACTIVITY WAS 49.87% AND THAT IN SHARES ACTIVITY WAS ONLY 32%. HE ARGUE D THAT THE REVENUE HAD HARPED ON REQUIREMENT OF MINIMUM 50% OF THE TOTAL FUNDS TO BE DEPLOYED IN A PARTICULAR ACTIVITY AND INCOME TO BE DERIVED THEREFROM WHICH SHOULD ALSO BE MORE THAN 50% OF TOTAL INCOME . THIS REQUIREMENT IS NOT SPELT OUT ANYWHERE IN THE STATUT E AND IS MERELY A BALD STATEMENT FROM THE LOWER AUTHORITIES WITH A MALIGN INTENTION TO TREAT THE LOSS AS SPECULATION LOSS. MOREOVER, THE ASSESSEE HAD EARNED INTEREST INCOME FROM LOANS AND ADVANCES TO THE TUNE OF RS. 47,49,739/- WHICH WAS MUCH MORE THAN THE TOTAL LOSS ON ACCOUNT OF SHARES. THE LD AO WITHOUT ANY RHYME OR REASON SOUGHT TO REDUCE THE INTEREST PAID IN THE SUM OF RS. 18,41,149/- FROM THE INTEREST INCOME AND COMPARED THE NET INTEREST INCOM E THEREON WITH THE ABSOLUTE FIGURE OF SHARE TRADING LOSS AND CONCLUDED THAT BASED ON INCO ME CRITERIA, THE ASSESSEES CASE FALLS 6 ITA NO.2736/KOL/2013 G.M.HOLDING (P) LTD., AY 2006-07 UNDER THE AMBIT OF EXPLANATION TO SECTION 73 OF THE ACT. HE ALSO ARGUED THAT IN ALL THE EARLIER YEARS, THE LOSS ARISING ON ACCOUNT OF SHARE S HAS BEEN ACCEPTED BY THE REVENUE AS BUSINESS LOSS AND THIS IS THE ONLY YEAR IN WHICH TH EY HAD TREATED AS SPECULATION LOSS. HE PLACED THE SCRUTINY ASSESSMENT ORDERS FOR THE ASST YEARS 2003-04 AND 2004-05 COMPLETED U/S 143(3) OF THE ACT BY THE LD AO ACCEPTING THE BU SINESS OF THE ASSESSEE AS SHARE TRADING AND FINANCING AND TREATED THE SHARE TRADING LOSS AS A REGULAR BUSINESS LOSS. HENCE IT COULD BE PRESUMED THAT THE LD AO HAD ACCEPTED THE PRINCIPAL BUSINESS IS GRANTING OF LOANS AND ADVANCES IN THE EARLIER YEARS BASED ON INCOME CRITE RIA AS WELL AS FUND DEPLOYMENT CRITERIA. 7. IN RESPONSE TO THIS, THE LD DR ARGUED THAT IT I S TRUE THAT THE APPLICABILITY OF EXPLANATION TO SECTION 73 OF THE ACT WAS LOOKED INT O BY THE LD AO ONLY IN THE YEAR UNDER APPEAL, BUT NON-CONSIDERATION OF THE SAME IN THE EA RLIER YEARS WOULD NOT AUTOMATICALLY MAKE THE ACTION OF THE ASSESSEE VALID IN EARLIER YEARS. HE ALSO STATED THAT THE DIVIDEND INCOME BEING EXEMPT SHOULD BE EXCLUDED WHILE CONSIDERING T HE INCOME CRITERIA OF THE ASSESSEE FOR THE APPLICABILITY OF EXPLANATION TO SECTION 73 OF T HE ACT. HE FURTHER ARGUED THAT THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO PROVE THAT IT IS A BANKING COMPANY OR ENGAGED IN THE PRINCIPAL BUSINESS OF LOANS AND ADVANCES. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAD DERIVED INTEREST INCO ME FROM LOANS AND ADVANCES TO THE TUNE OF RS. 47,49,739/- AND THE LOSS ON ACCOUNT OF SHARE TRADING WAS RS. 32,15,349/-. THERE IS NO JUSTIFIABLE REASON TO REDUCE THE INTEREST PAID IN T HE SUM OF RS. 18,41,149/- FROM THE INTEREST INCOME. THERE CANNOT BE ANY PRESUMPTION THAT THE LOANS BORROWED ON WHICH INTEREST WAS PAID WERE UTILIZED ONLY FOR THE PURPOSE OF GRANTING LOANS AND ADVANCES. THERE IS NO CATEGORICAL FINDING GIVEN BY THE LOWER AUTHORITIES IN THIS REGARD. WE FIND FROM THE CHARTS MENTIONED HEREINABOVE, THAT BOTH ON INCOME CRITERIA AS WELL AS FUND DEPLOYMENT CRITERIA, THE ASSESSEES CASE WOULD SQUARELY FALL UNDER THE EXCEP TIONS TO EXPLANATION TO SECTION 73 OF THE ACT. WE ALSO FIND THAT THE REVENUE HAD ACCEPTED TH E STAND OF THE ASSESSEE TO BE ENGAGED IN PRINCIPAL BUSINESS OF GRANTING LOANS AND ADVANCES I N THE EARLIER YEARS UNDER SCRUTINY ASSESSMENT PROCEEDINGS FOR THE ASST YEARS 2003-04 A ND 2004-05 WHEREIN SIMILAR FACTS AND CIRCUMSTANCES AS THAT OF THE YEAR UNDER APPEAL EXIS TED. HENCE THERE IS NO REASON TO DEVIATE FROM THE SAID STAND. WE ARE NOT INCLINED TO AGREE WITH THE ARGUMENT OF THE LD DR THAT THE 7 ITA NO.2736/KOL/2013 G.M.HOLDING (P) LTD., AY 2006-07 ASSESEE HAD NOT ADDUCED ANY EVIDENCE TO PROVE THAT IT WAS PRINCIPALLY ENGAGED IN THE BUSINESS OF LOANS AND ADVANCES. THIS ASPECT HAS BE EN ELABORATELY DEALT WITH BY THE LD AO IN HIS ORDER ITSELF AND MECHANICALLY CONCLUDED THAT TH E ASSESSEE HAD NOT DEPLOYED MORE THAN 50% OF ITS FUNDS IN ORDER TO COME UNDER THE AMBIT O F PRINCIPAL BUSINESS. WE FIND THAT NO SUCH REQUIREMENT IS PROVIDED IN THE PROVISIONS OF T HE IT ACT. ACCORDINGLY, WE DIRECT THE LD AO TO TREAT THE SHARE DEALING LOSS AS A REGULAR BU SINESS LOSS. IN VIEW OF THIS DECISION, THE APPORTIONMENT OF RS. 3,41,408/- TOWARDS BIFURCATION OF EXPENSES TOWARDS SHARE DEALING AND NON SHARE DEALING TRANSACTIONS WOULD BECOME INFRUCT UOUS. HENCE THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 18.11.201 6 SD/- SD/- (S.S. VISWANETHRA RAVI) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED :18TH NOVEMBER, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT G. M. HOLDING (P) LTD., 8/1, CHOWRINGHE E SQUARE, 3 RD FLOOR, KOLKATA-700 017. 2 RESPONDENT ITO, WARD-7(4), KOLKATA 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .