Judgment :- MISHRA, J. A question on the facts and in the circumstances of the case common to the assessment years 1959-60 to 1961-62 with respect to the application of the provisions of section 23A of the Indian Income-tax Act, 1922, and for the assessment year 1962-63 in respect of section 104 of the Income-tax Act, 1961 "in the case of a company whose business consists wholly or mainly in the dealing in or holding of investments. . . ."in place of the expression" an investment company" in section 104 of the 1961 Act. Whenever questions arose, however, how to understand the expressions "wholly or mainly in the dealing in or holding of investments" as occurring in section 23A of the 1922 Act and the Explanation thereto and the meaning the expression "investment company" should receive for the interregnum after the repeal of the 1922 Act and until a definition was introduced under section 109 of the 1961 Act, the courts accepted that a company, whose business consisted wholly or mainly in the dealing in or holding of investments, was not different from an investment company, and thus when a matter went before the Supreme Court in appeal against a judgment of a High Court (see 1968 (69) ITR 614 (Guj)) on a reference under section 66(1) of the 1922 Act, the Supreme Court in the case of CIT v. Distributors (Baroda) P. Ltd. 1972 AIR(SC) 288, 1972 (83) ITR 377, 1972 (4) SCC 353 , 1972 SCR 726 , 1972 (1) CTR 274, 1972 CTR(SC) 275 said as follows: "We have now to see what exactly is the meaning of the expression 'in the case of a company whose business consists wholly or mainly in the dealing in or holding of investments' in the main section 23A and the expression 'in the case of a company whose business consists wholly or mainly in the dealing in or holding of investments' in clause (i) of Explanation 2 to section 23A. The Act contains many mind-twisting formulas but section 23A, along with some other sections, takes the place of pride amongst them. Section 109 of the 1961 Income-tax Act, which has taken the place of the old section 23A of the Act is more understandable and less abstruse. But in these appeals, we are left with section 23A of the Act. The Act contains many mind-twisting formulas but section 23A, along with some other sections, takes the place of pride amongst them. Section 109 of the 1961 Income-tax Act, which has taken the place of the old section 23A of the Act is more understandable and less abstruse. But in these appeals, we are left with section 23A of the Act. Clause (i) of Explanation 2 to section 23A concerns itself with a company whose business consists 'wholly or mainly in the dealing in or holding of investments'. The word 'mainly' in that clause as well as in the main section 23A must necessarily take its colour from the word 'wholly' preceding that word, in those provisions. In other words, the company which comes within the scope of those provisions must be one whose primary business must be 'the dealing in or holding of investments'. If a company engages itself in two or more equally or nearly equally important business activities, then it cannot be said that the company's business consists 'wholly or mainly' in dealing in a particular thing. Further, even in cases where a company has more than one business activity and one of its activities is more substantial than the others, unless that activity is the primary activity of the company, it cannot be said that that cornpany is engaged in 'wholly or mainly' in any one of its business activities. Section 23A, in our opinion, applies only to cases where the primary activity of the company is 'the dealing in or holding of investments'. . . . Section 23A speaks of the business of 'holding of investments'. Here comes the enigma. It is easier to understand when the section speaks of a company having the business of dealing in investments though to say that the company is dealing in investments may, at first sight, look somewhat incongruous. When the Legislature spoke of dealings in investments, it meant dealing in shares, stocks and securities, etc. But when a person invests in the shares of some of the companies, it is difficult to say that his business is one of investing. In commercial circles, investing is not considered as business. An investor may feel perplexed if he is called a businessman.... We cannot say that the Legislature did not know its own mind when it used that expression in section 23A. In commercial circles, investing is not considered as business. An investor may feel perplexed if he is called a businessman.... We cannot say that the Legislature did not know its own mind when it used that expression in section 23A. We must give some reasonable meaning to that expression. No part of a provision of a statute can be just ignored by saying that the Legislature enacted the same not knowing what it was saying. We must assume that the Legislature deliberately used that expression and it intended to convey some meaning thereby. The expression 'business' is a well-known expression in income-tax law. It means, as observed by this court in Narain Swadeshi Weaving Mills v. CEPT 1955 AIR(SC) 176, 1954 (26) ITR 765, 1955 SCJ 30, 1955 (1) SCR 952 : 'some real, substantial and systematic or organised course of activity or conduct with a set purpose'. This is also the meaning given to that expression in the earlier decisions of the High Courts and the Judicial Committee. We must, therefore, proceed on the basis that the Legislature was aware of the meaning given by courts to that expression when it incorporated section 23A into the Act in 1957. This is also the meaning given to that expression in the earlier decisions of the High Courts and the Judicial Committee. We must, therefore, proceed on the basis that the Legislature was aware of the meaning given by courts to that expression when it incorporated section 23A into the Act in 1957. Hence we must hold that when the Legislature speaks of the business of 'holding of investments', it refers to real, substantial and systematic or organised course of activity of investment carried on by an assessee for a set purpose such as earning profits." The Supreme Court got another occasion to go into this aspect of the law in the case of Nawn Estates (P.) Ltd. v. CIT 1977 AIR(SC) 153, 1977 (106) ITR 45, 1977 (1) SCC 7 , 1977 (1) SCR 798 , 1977 CTR(SC) 19 and observed this time as follows: "It would be seen that the expression 'company whose business consists wholly or mainly in the dealing in or holding of investments' consists of two parts, viz., (1) a company whose business consists wholly or mainly in the dealing in investments, and (2) a company whose business consists wholly or mainly in holding of investments, and what we are required in these appeals is to find out the true meaning of the latter part of the expression, i.e., of 'a company whose business consists wholly or mainly in holding of investments', in the context of sub-section (1) of section 23A of the Act and Explanation 2(i) thereto and to determine whether the appellant is a company whose business falls within the ambit of the said second part of the expression. . . . It is true that the term 'investment' is not defined in the Income-tax Act but it cannot be ignored that the Act does not lay down that the terms and expressions not defined therein shall have the same meaning as given to them in the Companies Act in a particular context. It may also be noted in this connection that although the Legislature amended section 23A of the Act in 1955, and, thereafter, it did not adopt the definition of 'investment companies' as given in section 87(f) of the Indian Companies Act, 1913, or section 372(11) of the Companies Act, 1956. It may also be noted in this connection that although the Legislature amended section 23A of the Act in 1955, and, thereafter, it did not adopt the definition of 'investment companies' as given in section 87(f) of the Indian Companies Act, 1913, or section 372(11) of the Companies Act, 1956. It appears that while enacting section 23A of the Act and Explanation 2(i) thereto, the Legislature intended to cover fields of activity wider than those contemplated by the aforesaid provisions of the Companies Act, 1913 or 1956. The term 'investment' in the context in which it occurs not being a term of art, there is, in our judgment, no warrant for giving it the restricted meaning as canvassed by Mr. Mukherjee. We think, in a situation like the one with which we are confronted, resort should be had not to the technical meaning of the term but to its popular meaning with reference to the context in which it occurs." After taking notice thereafter of various pronouncements in the courts in England as well as the courts in India, including the case of CIT v. Distributors (Baroda) P. Ltd. 1972 AIR(SC) 288, 1972 (83) ITR 377, 1972 (4) SCC 353 , 1972 SCR 726 , 1972 (1) CTR 274, 1972 CTR(SC) 275 (SC), the Supreme Court in Nawn Estates (P.) Ltd. v. CIT [1977] 106 IT 45 (SC) endeavoured to interpret "investment" in the popular sense as used by businessmen and observed: "... and so construing it, it would, in our opinion, embrace within its sweep the appellant-company whose primary or principal income is admittedly derived from house properties which it leases out to tenants. ... Thus the position that emerges from the abovementioned decisions is that the aforesaid expression cannot be limited to companies whose principal business is the acquisition and holding of shares, debentures, stocks or other securities as contended on behalf of the appellant but covers companies whose primary or principal source of income is house property or capital gains as well. The decision in CIT v. Distributors (Baroda) P. Ltd. 1972 AIR(SC) 288, 1972 (83) ITR 377, 1972 (4) SCC 353 , 1972 SCR 726 , 1972 (1) CTR 274, 1972 CTR(SC) 275 (SC), on which reliance has been placed by Mr. The decision in CIT v. Distributors (Baroda) P. Ltd. 1972 AIR(SC) 288, 1972 (83) ITR 377, 1972 (4) SCC 353 , 1972 SCR 726 , 1972 (1) CTR 274, 1972 CTR(SC) 275 (SC), on which reliance has been placed by Mr. Mukherjee, is not helpful to the appellant as it turned on the particular facts of that case." The Tribunal had the advantage of both the judgments of the Supreme Court before it but it has sensed, somehow, that in Distributors (Baroda) P. Ltd.'s case 1972 AIR(SC) 288, 1972 (83) ITR 377, 1972 (4) SCC 353 , 1972 SCR 726 , 1972 (1) CTR 274, 1972 CTR(SC) 275, the Supreme Court has laid down such tests, which indicate that a company which held shares in other companies and received dividends but its investment remained steady without change, did not satisfy the requirements of a company whose business consisted wholly or mainly in the holding of investments. Before we advert to the questions that should be addressed and answered by us, we may mention that we have been provided with a judgment of the Bombay High Court in the case of CIT v. Aloo Investment Co. P. Ltd. 1980 (123) ITR 132, 1979 (1) TAXMAN 433 but any detailed exercise to understand the meaning of the word "investment" or to consider the definition of investment company as above, is not necessary. The best which can be said about this is said in the two judgments of the Supreme Court in CIT v. Distributors (Baroda) P. Ltd. 1972 AIR(SC) 288, 1972 (83) ITR 377, 1972 (4) SCC 353 , 1972 SCR 726 , 1972 (1) CTR 274, 1972 CTR(SC) 275 and Nawn Estates (P.) Ltd. v. CIT 1977 AIR(SC) 153, 1977 (106) ITR 45, 1977 (1) SCC 7 , 1977 (1) SCR 798 , 1977 CTR(SC) 19. We, however, may add that "investment" has been understood as an expenditure to acquire property or other assets in order to produce revenue, the asset so acquired, the placing of capital or laying out of money in a way intended to secure income or profit from its employment and it is indicated in Black's Law Dictionary, sixth edition, "to purchase securities of a more or less permanent nature, or to place money or property in business ventures or real estate, or otherwise lay it out, so that it may produce revenue or gain (or both) in the future" . An investment company has been introduced as any issuer which : (1) is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities ; (2) is engaged or proposes to engage in the business of issuing face-amount certificates of the instalment type, or has been engaged in such business and has any such certificates outstanding ; or (3) is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40 per cent. of the value of such issuer's total assets (exclusive of Government securities and cash items) on an unconsolidated basis. (See Black's Law Dictionary-Sixth edition). Thus a company or trust, which uses its capital to invest in other companies, and an investment company differ from a holding company in that the latter seeks control of the ventures in which it invests while an investment company seeks the investment for its own sake and normally diversifies its investment. It has been pointed out in Black's Law Dictionary that there are two principal types, the closed end and the open end, or mutual fund. Shares in closed-end investment companies are readily transferable in the open market and are bought and sold like other shares. Capitalisation of these companies remains the same unless action is taken to change. Open-end funds sell their own new shares to investors, stand ready to buy back their old shares, and are not listed. Shares in closed-end investment companies are readily transferable in the open market and are bought and sold like other shares. Capitalisation of these companies remains the same unless action is taken to change. Open-end funds sell their own new shares to investors, stand ready to buy back their old shares, and are not listed. Open-end funds are so called because their capitalisation is not fixed ; they issue more shares as demandedA glaring misunderstanding thus about the type of activity which alone will satisfy the rigorous definition-that is real, substantial and systematic or organised course of activity of investment by the Tribunal has resulted in the catastrophic confusion and what should have been understood without any attempt to be pedantic and thus unreal in requiring the satisfaction of the test of real, substantial and systematic or organised course of activity of investment, would have been avoided. We propose to make no effort to go into any details of hair-splitting of the words like "real, substantial and systematic or organised" for it is indeed as simple as has been indicated by the Supreme Court in its judgment in the case of CIT v. Distributors (Baroda) P. Ltd. 1972 AIR(SC) 288, 1972 (83) ITR 377, 1972 (4) SCC 353 , 1972 SCR 726 , 1972 (1) CTR 274, 1972 CTR(SC) 275 itself that no one should have any doubts about it. The Supreme Court took notice of the memorandum of association of the company and noticed that the objects of the assessee-company were manifold and the object of carrying on the business of "dealing in or holding of investments" is only one of them and on that basis held. "Hence, the memorandum of association does not assist us in deciding whether the business of the assessee-company 'consists of wholly or mainly in the dealing in or holding of investments'." The Supreme Court then took notice of the fact that the Tribunal had found that the managed company's shares were acquired by the assessee-company for the purpose of safeguarding its managing agency business and observed: "Therefore, it is quite clear that those investments were made not in the course of any business of investment but for the purpose of securing its managing agencies. Those investments were made, for a collateral purpose, viz., to have a firm grip over its managing agency business. Those investments were made, for a collateral purpose, viz., to have a firm grip over its managing agency business. If we are correct in this finding--we think we are--then it follows that the dividend income from shares of the managed companies cannot be taken into consideration in finding out whether the assessee-company's business 'consisted wholly or mainly in the dealing in or holding of investments'. The investments made by the assessee-company in the shares of the managed-companies are essentially linked with its managing agencies and not with the dealing of that company in shares of the other companies. In other words, those investments form part of the assessee-company's managing agency business activity. If we add the dividend income of the shares of the managed companies to the managing agency commission, the total income from those two sources is much more than the income earned by the assessee-company from its share dealings, in each one of the assessment years. Hence, viewed from the point of view of profits earned by the assessee-company, it cannot be said that in the relevant previous years the assessee-company's business 'consisted wholly or mainly in the dealing in or holding of investment'." The Supreme Court also looked at the question from the point of view of the assets employed by the assessee-company and recorded. "It is true that the assets used by the assessee-company in its share dealing are far more than that used by it for investment in the shares of the managed-company. But then we have to bear in mind that we do not exhaust the total assets of the company by merely referring to the tangible assets used by it. In addition, we have to take into consideration the value of the managing agencies held by the assessee-company. Looked that way, it cannot be said that the assets of the company, used in its share dealings, are far more than its other assets. In addition, we have to take into consideration the value of the managing agencies held by the assessee-company. Looked that way, it cannot be said that the assets of the company, used in its share dealings, are far more than its other assets. At any rate, on the basis of the assets used, it cannot be concluded that the assessee's business consisted 'wholly or mainly' in the dealing in investments." It is indeed gratifying to record that the Tribunal has chosen to rely upon the premises as chosen by the Supreme Court in its judgment in CIT v. Distributors (Baroda) P. Ltd. 1972 AIR(SC) 288, 1972 (83) ITR 377, 1972 (4) SCC 353 , 1972 SCR 726 , 1972 (1) CTR 274, 1972 CTR(SC) 275. But it is equally shocking to notice that it has brushed aside a clear and comprehensive judgment of the Supreme Court in the case of Nawn Estates (P.) Ltd. v. CIT 1977 AIR(SC) 153, 1977 (106) ITR 45, 1977 (1) SCC 7 , 1977 (1) SCR 798 , 1977 CTR(SC) 19 which has not only indicated the true meaning of the expression of a company whose business consists wholly or mainly in holding of investments, but has indicated how in these matters, the interest of the Revenue should be protected without in any manner burdening a company with the additional tax. It is a clear and categorical statement of the principle in the two judgments of the Supreme Court which should guide all concerned and there should be no attempt to read more than what the words convey to render them sometimes lifeless. The Tribunal has not realised that a repeated reference to real, substantial and systematic or organised course of activity of investment carried on by an assessee for the said purpose such as earning profits, in its proper analysis, only conveys that it should be a real and systematic investment by the assessee. The Supreme Court has never said that investment in a few chosen companies and continued investment in such companies cannot satisfy the requirements of a real, substantial and systematic or organised course of activity of investment for a set purpose such as earning profits. It has only indicated that the main purpose of the investment should be earning profits and if the profit is earned regularly and investment is continued on which the profit is earned, the requirements are fulfilled. It has only indicated that the main purpose of the investment should be earning profits and if the profit is earned regularly and investment is continued on which the profit is earned, the requirements are fulfilled. The assessee has admitted at more than one place that he has made investment in companies and has been holding shares from which it has been earning profit, In fact, it has conceded to have received dividends in all the years preceding the assessment years, with which we are concerned. It has, no doubt, shown in the memorandum of association, a catalogue of the activities of the company but has indulged, not even in a small measure, in any other activity except the activity of keeping the investments in the shares alive and receiving profits. There is nothing which can suggest that the investments by the assessee-company in the companies from which it has earned dividends, were for any purpose other than earning the dividends and perhaps by dint of its shares, it has secured representation in the board of directors of some of the companies. But representation to a shareholder in the board of directors can hardly be a collateral purpose of investment of money. Otherwise, even individuals receiving profits on their share holdings in companies will get a privilege to say the investment is collateral for securing a representation in the board of directors of the company. We have considered the relevant aspects of the matter to the extent we have felt necessary and come to the conclusion that the Tribunal has committed an error and wrongly decided the issue against the Revenue. We, accordingly, hold that the answer to the question referred to us, is in the negative.