Tarun Agarwala, J. - (1.) THE appellant is in the business of purchase and sale of shares and also derives income from dividend, commission and interest. For the assessment year 1992 -93 the appellant filed a return showing nil income. The appellant showed income from dividend, commission and interest under the head "profits & gains from business or profession".
(2.) THE Assessing Officer did not accept the submission of the appellant and while passing an order under Section 143(3) of the Income Tax Act (hereinafter referred to as the Act) held that the income disclosed by the appellant from dividend, commission and interest was liable to be assessed under the head "Income from other sources" and not under the head "profit & gains from business or profession" Being aggrieved by the order of the Assessing Officer, the appellant filed an appeal before the Commissioner of Income Tax (Appeal), who found that since the appellant had been purchasing shares and debentures and was also selling the same, the income derived in the form of interest, dividend, debentures and shares was liable to be assessed as business income and, therefore, such income was liable to be assessed under the head "profits & gains from business or profession". The Commissioner of Income Tax (Appeals), accordingly, allowed the appeal and deleted the addition so made by the Assessing Officer.
(3.) INCOME Tax Department, being aggrieved, filed a second appeal before the Tribunal, which was allowed. The Tribunal set aside the order of the appellate authority and restored the order of the Assessing Officer holding that the income of the assessee derived from dividend, commission etc was liable to be assessed under the head "Income from other sources" under Section 56(2) of the Act. The assessee, being aggrieved by the order of the Tribunal, has filed the present appeal under Section 260A of the Act, which was admitted on the following substantial questions of law: "A. Whether on the facts and in the circumstance of the case the ITAT was legally correct in holding that the dividend received by the appellant on the shares held by them as stock -in -trade of their shares business is assessable as income from other sources and not as business income? B. Whether on the facts and in the circumstances of the case the ITAT was legally correct in setting aside and reversing the order of the Commissioner of Income Tax (Appeal), Allahabad and restoring the order of the Assessing Officer on the other points too when the said points were neither argued nor passed.";