JUDGMENT Deepak Verma, J.— Heard Sri M.V. Seshachala, learned Counsel for the appellants and Sri S. Parthasarathi, learned Counsel for the respondent. 2. The Revenue is before us by filing this appeal under Section 260A of the Income Tax Act, 1961 (hereinafter shall be referred to in short as "the Act") against the order dated April 8, 2004, passed by the Income Tax Appellate Tribunal, Bangalore Bench "A", in I. T. A. No. 126/Bang/1997 for the assessment year is 1991-92. 3. The appeal before the Tribunal was also at the instance of the Revenue against the order passed by the Commissioner of Income Tax (Appeals). 4. The appellant has formulated the following substantial question of law: 1. Whether in the facts and circumstances of the case, the appellate authorities were correct to hold that the profit/loss derived by the assessee on the sale of equity shares held by the assessee in M/s. MIC Auto Ancillaries Limited cannot be treated as a capital loss as held by the Assessing Officer but should be treated as business loss of the assessee. 5. The facts of the case, lie in narrow compass, are as under: 6. The assessee filed a return for the assessment year 1991-92, disclosing a net loss of Rs. 18,93,312. The assessment was completed determining the total income at Rs. 11,89,208 before adjusting the brought forward loss of the earlier years. In computing the abovesaid total income, the Assessing Officer has disallowed share loss in respect of M/s. MIC Auto Ancillaries limited amounting to Rs. 29,56,870. 7. The assessee with an intention to promote M/s. MIC Auto Ancillaries Limited had purchased shares of the said company for a sum of Rs. 45,52,870. After holding such shares for a period of eight years, it thought it fit to sell the same. Ultimately the said shares held by the assessee of M/s. MIC Auto Ancillaries Limited were sold for a price of Rs. 15,96,000 thereby it was put to a net loss of Rs. 29,56,870. 8. According to the assessee, that the shares were shown as investment in the balance-sheet, yet the business of the assessee itself is investment in shares and promotion of industrial enterprise. To press this point further the amended provisions of the memorandum of association of the company were brought to our notice. 29,56,870. 8. According to the assessee, that the shares were shown as investment in the balance-sheet, yet the business of the assessee itself is investment in shares and promotion of industrial enterprise. To press this point further the amended provisions of the memorandum of association of the company were brought to our notice. It was also further contended that the expenditure incurred for promoting the said company was claimed as business loss for the assessment year 1984-85. The said loss has been allowed as business loss by the Income Tax Appellate Tribunal, Cochin Bench vide its order dated December 19, 1992. 9. The Commissioner of Income Tax (Appeals) and the Tribunal both have held in favour of the assessee that investment in shares of such company should be treated as in the course of business and not as capital investment. From the main object of the company it was clear that it is also carrying on the business of investment and finance company and to buy, hold and sell the shares of such company. The Commissioner of Income Tax (Appeals) as well as the Tribunal both accordingly held that holding of shares by the assessee in pursuance of the said object should be treated as holding of shares for the purpose of business. Accordingly any loss on sale of such shares should be treated as business loss and not loss under the head "Capital gain" and "Capital loss." While coming to the said conclusion, the Tribunal has placed reliance on a judgment of the Supreme Court in the case of Sutlej Cotton Mills Limited Vs. Commissioner of Income Tax, Calcutta, AIR 1979 SC 5 . The Tribunal has also reproduced the relevant paras of the aforesaid judgment. In view of the aforesaid judgment, it is necessary to examine as to what was the true nature of the transaction and whether in fact it has resulted in profit or loss to the assessee. 10. At least this fact could not be disputed by the learned Counsel for the Revenue that the assessee had purchased the shares of M/s. MIC Auto Ancillaries Limited by investing a sum of Rs. 45,52,870. But while selling such shares it could only fetch a price of Rs. 15,96,000, thereby it was put to a net loss of Rs. 29,56,870. 11. 45,52,870. But while selling such shares it could only fetch a price of Rs. 15,96,000, thereby it was put to a net loss of Rs. 29,56,870. 11. In the light of the aforesaid discussions and in the light of the judgment of the Supreme Court in the matter of Sutlej Cotton Mills Limited Vs. Commissioner of Income Tax, Calcutta, AIR 1979 SC 5 , we are of the considered opinion that the question of law has to be answered against the Revenue and in favour of the assessee. We accordingly do so. The appeal stands disposed of.