Bhaskar Bhattacharya, J. - (1.) THIS appeal is at the instance of the assessee and is directed against an order dated 6th August, 2003, passed by the Income-tax Appellate Tribunal, "C" Bench, Kolkata, in ITA No.1146(Kol) of 2001 relating to the Assessment Year 1997-98 dismissing the appeal preferred by the assessee.
(2.) BEING dissatisfied, the assessee has come up with the present appeal. The facts leading to the filing of this appeal may be summed up thus: a) The appellant before us is a company incorporated under the Companies Act, 1956 as a Public Company limited by share. b) For the Assessment Year 1997-98, the appellant on 30th November, 1997 filed its return of income along with Auditors Report and audited statement of account. In the said return for the abovementioned Assessment Year, the appellant disclosed a loss of Rs.15,61,89,342/- and the same was processed under Section 143(1) of the Act. On 30th June, 1998, the appellant filed a revised computation during the course of assessment showing a loss of Rs.14,29,96,467/-. The business loss was shown at Rs.18,41,11,592/-. During the previous year, the appellant derived income under the other sources by way of interest to the tune of Rs.2,33,23,779/- and dividend income to the tune of Rs.1,15,74,357/- and speculation profit of Rs.70,36,500/-. c) A notice under Section 143(2) was served upon the appellant and pursuant to the said notice, the appellant"s representative appeared and produced Books of Accounts, Bill, Vouchers and Bank Statements. The appellant contended that the loss incurred in share dealing business should not be taken as speculation loss as per explanation to Section 73 of the Income-tax Act. d) By an order dated 1st March, 2000, under Section 143(3) of the Act, the Assessing Officer treated the business loss of Rs.18,41,11,592/- as speculation loss on the basis of explanation to Section 73 of the Act. e) BEING dissatisfied, the appellant preferred an appeal before the Commissioner of Income-tax (Appeals) and the grievance of the appellant before the said Appellate Forum was that the Assessing Officer should not have treated the business loss of Rs.18,41,11,592/- as speculation loss by invoking the explanation to Section 73 of the Act. In other words, according to the appellant, the Explanation to Section 73 of the Act was not applicable to the appellant and the same was purely a business loss and, therefore, the appellant was entitled to carry forward the same in the next Assessment Year. f) The Commissioner of Income-tax (Appeals), however, by order dated 13th March, 2011 dismissed the appeal by affirming the order of the Assessing Officer. g) BEING dissatisfied, the appellant preferred an appeal before the Income-tax Appellate Tribunal and by the order impugned in this appeal the Tribunal has affirmed the order passed by the Commissioner of Income-tax (Appeals). A Division Bench of this Court at the time of admission of this appeal has formulated the following substantial questions of law: "1. Whether the Explanation to Section 73 which creates a legal fiction by which the purchase and sale of shares specified in the said Explanation which is specifically used for the purpose of Section 73 as deemed speculation business can be applied to Sections 70, 71 and 72 and in determining the gross total income the said Explanation to Section 73 can at all be applied while considering the set off of loss under Sections 70 and 71 and carry forward of such loss under Sections 70 and 71 and carry forward of such loss under Section 72 of the Act? "2. Whether the loss arising from the business of dealing in share not falling under the definition or speculative transaction appearing in Section 43(5) of the Act can be carried forward under Section 72 of the Act and whether in such a case the said claim can be disallowed by relying upon Explanation to Section 73 of the Act? "3. Whether on the facts and in the circumstances of the case the decision of the Income Tax appellate Tribunal was perverse in so far as the same directly applied the ratio of the decision in Re: RPG Industries Ltd. Case In ITA No.369 (Kol) of 1996 since reported in 85 ITD 105(Cal) without considering as to whether the said ratio applied to the present case and thereafter restored the matter to the file of the Assessing Officer for recomputation of loss?" In this appeal, the appellant came up with an application under Order 41 Rule 27 of the Code of Civil Procedure for taking into consideration some additional evidence including the orders passed by the Tribunal of "B" Bench, Kolkata in ITA No.1086/Cal/2000 relating to Assessment Year 1995-96 of the appellant as also the order of "B" Bench of the Tribunal in ITA NO.1531(Kol) of 2005 relating to the Assessment Year 1996-97 showing that in those orders, it has been held that the principal business of the appellant was that of granting loans and advances and as such, the case of the appellant had fallen within the exceptions to Explanation to Section 73 of the Act. It appeared that against such orders the Revenue preferred appeals before this Court but those were dismissed and those orders have attained finality.
(3.) THIS Court allowed such application for taking those orders as additional evidence and gave liberty to the Revenue to produce evidence in rebuttal if they so desired. The Revenue, however, did not file any further evidence to rebut those pieces of additional evidence filed by the appellant. Consequently, this appeal was heard after taking into those subsequent decisions of the Tribunal as additional pieces of evidence. Therefore, the only question that arises for determination in this appeal is whether the appellant comes within exception to the Explanation added to Section 73 of the Income-tax Act.;