JUDGMENT : K.S. Jhaveri, J. 1. Being aggrieved and dissatisfied with the impugned judgment and order dated 31.05.2006 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A' (hereinafter referred to as ITAT) in ITA No. 11/Ahd/2004, 9/Ahd/2004, 10/Ahd/2004 and 8/Ahd/2004 for the Assessment Years 2000-01, 1998-99, 1999-00, 1997-98 respectively, the revenue has preferred the present Tax Appeals for consideration of the following substantial question of law: "Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the respondent company was not an investment company within the definition provided in the Interest Tax Act and thereby no interest tax was levy able thereon?" 2. The assessment of the respondent was reopened by issuing notice under Section 10 of the Interest Tax Act (hereinafter referred to as 'the Act'). The reasons mentioned therein were that the respondent - company derived income from interest and discounting charges which was liable to interest tax. The Assessing Officer observed that the principal business of assessee is dealing in shares and securities which is evident from the fact that it is having huge securities in current assessment and had dealt in these securities during the relevant years. He therefore observed that Section 2(5B) (ii) of the Act would be applicable in the case of the assessee and provision of the Act were applied. 3. On appeal the CIT (Appeals) cancelled the assessment order. On appeal before the ITAT, by impugned judgment and order, ITAT confirmed the order passed by CIT(A) and dismissed the appeals filed by the revenue. Being aggrieved and dissatisfied with the impugned judgment and orders passed by the ITAT, the revenue has preferred the present Tax Appeals for consideration of the aforesaid substantial question of law. 4. Mr. Manish Bhatt, learned Senior Counsel appearing with Ms. Mauna Bhatt, learned advocate appearing for the revenue submitted that the Tribunal has overlooked the vital aspect that the assessee had dealt in large number of securities during the relevant year and therefore it would be apparent that the assessee had used the securities and it had indulged into the business of acquisition of shares, stocks etc. Drawing the attention of this Court to the provision of Section 2(5B)(ii) of the Act, he submitted that the case of the assessee would fall within the definition of investment company as defined under the Act. 4.1 Mr. Drawing the attention of this Court to the provision of Section 2(5B)(ii) of the Act, he submitted that the case of the assessee would fall within the definition of investment company as defined under the Act. 4.1 Mr. Bhatt further submitted that the Tribunal has also erred in interpreting the phrase which carries on as its principal business by restricting on comparative figure and overlooking the intention of the legislature behind the same. He submitted that the phrase 'by whatever name called' in sub-section would cover the case of the assessee. 4.2 Mr. Bhatt submitted that the case of the assessee for all the assessment years in question other that 1997-98 would be covered by the very decision of this Court rendered in Tax Appeal No. 1502 to 1506 of 2006 dated 11.07.2016. He submitted that so far as A.Y. 1997-98 is concerned, the Tribunal has wrongly observed that apart from the income from the development charges reported in the profit and loss account, the schedule 5 of the balance sheet reported assets of Rs. 50,22,12,244/- (included in the amount of Rs. 119,71,80,800/-) towards amount paid to owner of land. Similarly, the schedule 6 of the Balance Sheet reported liability of Rs. 64,10,43,636/- towards booking amount received from the buyers. He submitted that the Tribunal has erred in interpreting that the principal business of the assessee is construction/development of real estate business. He submitted that the Tribunal failed to take into consideration that the chunk of income received by the assessee is in the form of interest income and therefore the assessee ought to have been held as a finance company. 4.3 Mr. Bhatt submitted that as per Memorandum of Association and Articles of Association of the company, one of the objects incidental or ancillary to the attainment of the main object was to invest money of the company which is not immediately required for the purpose of business in investment or securities. He submitted that as per paragraph 12 & 57 of the Memorandum of Association and Article of Association, the assessee fell within the definition of 'financial company' as provided under sub clauses (iv)(va) and (vi) of Section2(5B) of the Act. In support of his submissions, Mr. Bhatt has relied upon the decision of the Apex Court in the case of State Bank of Patiala v. Commissioner of Income-Tax reported in [2016] 383 ITR 244 (SC). 5. Mr. In support of his submissions, Mr. Bhatt has relied upon the decision of the Apex Court in the case of State Bank of Patiala v. Commissioner of Income-Tax reported in [2016] 383 ITR 244 (SC). 5. Mr. S.N. Soparkar, learned Senior Counsel appearing with Mr. B.S. Soparkar, learned advocate for the assessee submitted that before concluding that the assessee is a finance company, the Assessing Officer ought to have verified the records of the subsequent years in detail. He submitted that the profit and loss account of subsequent years reported that amount realised on sale of various properties and sale proceeds/income from construction activity as under:- A.Y. 1999-2000 Rs. 55,53,25,019 A.Y. 2000-2001 Rs. 3,36,25,000 A.Y. 2002-2003 Rs. 36,05,11,796 5.1 Mr. Soparkar submitted that the income from interest in all the above years is much lower compared to sale proceeds of property/income from construction. He submitted that the activity of providing finance as referred to by learned advocate for the revenue is merely an ancillary activity. He submitted that for example for the assessment year 1998-99, out of the total interest of Rs. 9,58,61,670/-, the interest received was Rs. 7,52,286/- whereas interest on inter corporate deposits was Rs. 9,27,47,240. He submitted that in fact the income from the development or construction would be reflected in the year of completion of construction and therefore the higher income from interest reported in the profit and loss account of the assessee company cannot make it a finance company. 6. We have heard learned Counsels appearing for the revenue as well as the assessee at length. The CIT(A) cancelled the assessment order holding that the assessee had a major dealing in other business and therefore the definition as stated that it should be a principal business would not apply in the case of the assessee. The Tribunal upheld the order passed by CIT(A) holding that the assessee's case does not fall in the category of investment company as per the definition provided under Section 2(5B) of the Act. From the materials placed on record, the assessee cannot be said to have carried on the activity of earning interest as its principal business. The material also doesn't show that activity in question is the regular business of the assessee. From the materials placed on record, the assessee cannot be said to have carried on the activity of earning interest as its principal business. The material also doesn't show that activity in question is the regular business of the assessee. It is only by relying upon one of the objects of the company as well as Section 2(5B) (ii) & 2 (5B)(vi) of the Act that the department contends that principal business as contemplated in Section 2(5B)(v) and (va) is being carried on by the assessee. Therefore, a close look at Section 2(5B)(v), (va) and (vi) which read as under is required: "Section 2(5B) in The Interest- Tax Act, 1974 (5B) "financial company" means a company, other than a company referred to in sub- clause (i), (ii) or (iii) of clause (5A), being- (i) a hire- purchase finance company, that is to say, a company which carries on, as its principal business, hire- purchase transactions or the financing of such transactions; (ii) an investment company, that is to say, a company which carries on, as its principal business, the acquisition of shares, stock, bonds, debentures, debenture stock or securities issued by the Government or a local authority, or other marketable securities of a like nature; (iii) a housing finance company, that is to say, a company which carries on, as its principal business, the business of financing of acquisition or construction of houses, including acquisition or development of land in connection therewith; (iv) a loan company, that is to say, a company[not being a company referred to in sub- clauses (i) to (iii)] which carries on, as its principal business, the business of providing finance, whether by making loans or advances or otherwise; (v) a mutual benefit finance company, that is to say, a company which carries on, as its principal business, the business of acceptance of deposits from its members and which is declared by the Central Government under section 620A of the Companies Act, 1956, to be a Nidhi or Mutual Benefit Society; 8 (vi) a miscellaneous finance company, that is to say, a company which carries on exclusively, or almost exclusively, two or more classes of business referred to in the preceding sub- clauses;]" 6.1 It can be seen that Section 2(5B)(vi) refers to 'Miscellaneous Finance Companies'. A Miscellaneous Finance Company is a Company which exclusively or almost exclusively carries on two or more businesses of the nature provided in the clauses preceding clause (vi). For a company to fall in clause (vi), the question to be asked is whether it carries on exclusively or almost exclusively two or more classes of business referred to in the preceding sub-clause of Section 2(5B)(vi) and not whether such a company carries on as its principal business such two or more classes of business. In the event of dispute raised by the Assessing Officer contending that assessee is a Miscellaneous Finance Company within the meaning of Section 2(5B)(vi), it is for the Assessing Officer to establish either of the two facts being (a) that the company carries on two or more businesses above stated exclusively (b) that it carries on such two businesses almost exclusively. To come to such a conclusion, the Assessing Officer must have in his possession the evidence and not mere surmises and conjectures. 6.2 A businessman may indulge into several activities at the same time. One of such activities may be intended as the principal business. In the principal business, a regular, frequent and sizeable activity of same nature extended over a considerable period of time would be reflected, whereas in the subsidiary business there may not be regular, frequent and sizeable business activity though such activity may be spread over to a certain longer period. One of the considerations for carrying on subsidiary business may be the utilisation of extra or idle funds. For that purpose, the funds may be invested by the company in one or more activities contemplated in Section 2(5B) of the Act. Such activities may be carried on for a considerable longer period, may be for one or two years, parallel with the main business activity. Once funds are required for the main business activity, the businessman may opt to withdraw the same from such extra activities. Under such circumstances it cannot be said that the irregular, infrequent but sizeable volume of the business activity is the business of the nature contemplated in Section 2(5B) of the Act. 6.3 For the purpose of Section 2(5B)(vi), it will have to be seen whether the assessee carries on two or more businesses of the nature contemplated in Section 2(5B)(vi) exclusively or almost exclusively on a regular and frequent basis. 6.3 For the purpose of Section 2(5B)(vi), it will have to be seen whether the assessee carries on two or more businesses of the nature contemplated in Section 2(5B)(vi) exclusively or almost exclusively on a regular and frequent basis. The expression 'Exclusively' would exclude the business activities other than those contemplated in Section 2(5B)(i) to (v). Similarly, the expression almost exclusively would imply that the business activities of the nature other than section 2(5B) are negligible. 6.4 In a case where it is shown that the business activity other than the one contemplated in Section 2(5B) constitutes in the main object of the company and when it is shown that parallel to such main business activity, the assessee also carries on two or more businesses as contemplated in Section 2(5B)(vi) but not exclusively or almost exclusively as its regular and frequent business, it cannot be said that such business activities as may be falling under section 2(5B)(vi) are exclusive or almost exclusive business of the assessee company on the mere ground that in one or two previous years the assessee made exclusive or almost exclusive investment in the nature of two or more businesses provided in Section2(5B), even though during that period the principal or main business was continued. 6.5 Admittedly, investment of the money is only subsidiary object of the company; main object being construction activity. From the objects of the assessee it appears that it invests money when not required in the business of construction. Therefore it cannot be said that assessee carries on the business categorized under clauses (v) & (va) or any other clauses 'exclusively' or 'almost exclusively' within the meaning of clause (vi) of Section 2(5B) of the Act. 6.6 Moreover, it is a settled position of law that the interest expenses are allowable as deduction only when the borrowed money has been utilized for the purpose of the business of the assessee. It is required to be noted that for A.Y 1998-99, the Assessing Officer while framing assessment under Income Tax Act 1961 has specifically held that the assessee is not engaged in the business of financing. The Tribunal while discussing the issue as to whether the assessee company can be said to be a finance company has gone through the profit and loss account statements of each financial and assessment years. The Tribunal while discussing the issue as to whether the assessee company can be said to be a finance company has gone through the profit and loss account statements of each financial and assessment years. For the various years, learned counsels for the respective sides have produced the following table which has been taken on record:- Particulars Schedule F.Y.1996-97 F.Y. 1997-98 F.Y. 1998-99 F.Y. 1999-00 A.Y. 1997-98 A.Y. 1998-99 A.Y. 1999-00 A.Y. 2000-01 Income - - - - - Development Charges - 18000000 - - - Sales (Net) 8 - - - 252650453 Sales (Securities) - - - - 430794488 Job work Income (TDS Rs. 491614/-previous year Rs. NIL - - - - 20994900 Increase/(Decrease) in stock 9 - - - 259842210 Sales goods - - - 555325019 33625000 Other income 8 - 95851715 92861080 38966006 Profit on sale of investments - - - - 12616479 Profit on sale of assets - - - - 4052177 Sale of trading goods - 15404601 336399 - - Total - 33404601 96188114 648186099 533857273 Expenditure - - - - - Purchase - - 319416 683945298 - Purchase (Securities) - - - - 5556507 Trading Purchase - - - - 232167680 Cost of Sales - - - - 33994656 Employees Remuneration 9 1119154 1661212 4200394 - Employees emoluments 11 - - - 37631917 Administrative & other expenses 10/1 2/16 9283422 5512445 6784157 14200517 Interest & Finance charges 11/13 26297396 108983355 245235929 65202091 Provision for doubtful debts 14 - - - 25005046 Depreciation - 428178 553952 990230 16225993 Preliminary expenses written off - - - 19373 26280 Total - 34128150 117030380 941175381 518210580 Loss/Profit before tax - 223549 20842266 - 15646693 Add: Prior period adjustments (net) - 355405 115645 -26941 3682631 Income tax of earlier - - - -46019 87151 Loss for the year - 368144 20957911 - 11876900 Transfer from general reserve - 250000 - - Brought forward from last year - 425566 57422 -34716258 -327778500 Acquired on account of amalgamation - - - - -517284755 Balance carried to balance sheet 15 57422 20650489 -327778500 -833186355 Significant accounting policies and notes on account 12 - - - - 7. From the above figures, we have come to the conclusion that the 'exclusive' or 'almost exclusive' business of the assessee cannot be said to be that of providing finance which is whether by making loans and advances or otherwise. From the above figures, we have come to the conclusion that the 'exclusive' or 'almost exclusive' business of the assessee cannot be said to be that of providing finance which is whether by making loans and advances or otherwise. As compared to other receipts shown as income in the profits and loss account of the various A.Y in question, the interest income is a small fraction. Moreover, merely because the assessee did not carry out activity of construction for a particular year, it cannot be said that the 'exclusive' or 'almost exclusive' business of the assessee has changed. We are though not in agreement with the method of reasoning adopted by the Tribunal, we concur with the conclusion reached by the Tribunal. Moreover, for the assessment years in question other that 1997-98 the appeals would be covered by the very decision of this Court rendered in Tax Appeal No. 1502 to 1506 of 2006 dated 11.07.2016. Accordingly, the question raised in the present appeals is required to be answered in favour of assessee and against the revenue. 8. In view of the above, the question raised for consideration in the present appeals are answered in favour of the assessee and consequently, the impugned judgment and order passed by the ITAT is confirmed. Hence, the present Tax Appeals are dismissed. No costs.