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2013 (2) TMI 179 - ITAT MUMBAIDisallowance of speculation loss - CIT(A) treating the share trading loss as normal business loss and allowed expenses relating thereto which had been disallowed by the AO - Assessee is a company whose gross total income consists of house property, capital gain, other sources and loss from trading of shares & entire business consists of purchase and sale of shares - whether the provisions of Explanation to section 73 would apply ? - Held that:- As decided in Arvind Investments Ltd. (1990 (3) TMI 5 - CALCUTTA HIGH COURT) Explanation to Section 73 would apply even when entire business consists of purchase and sale of shares. Treatment of loss from different heads included in the gross total income - Held that:- This issue is covered by the judgment of Park View Properties (P.) Ltd. (2003 (1) TMI 69 - CALCUTTA HIGH COURT) following the judgment of CIT v. Harprasad & Co. (P.) Ltd. [1975 (2) TMI 2 - SUPREME COURT] and CIT v. J.H. Gotla [1985 (8) TMI 5 - SUPREME COURT] wherein held that loss is negative income, held that while considering the different constituents of gross total income, the figures in absolute terms should be considered whether positive or negative. The Hon'ble Court followed the earlier judgment in case of Eastern Aviation & Industries Ltd. (1993 (7) TMI 41 - CALCUTTA HIGH COURT) in which it was held that when the income from house property, capital gain and other sources even if positive is lower than figure of loss from business activities, it will not be a case of gross total income consisting mainly of income from house property, capital gain and other sources. Since the figure of loss in absolute terms in share trading was higher then income from other sources taken together, it was held that the provisions of Explanation to Section 73 would be applicable. Situation in the present case is identical. Therefore, following the above judgments it has to be held that case of the assessee will be covered by the provisions of Explanation to section 73. No contrary judgment of any other High Court or Apex Court has been brought to our notice or has been referred to by CIT(A) who has only relied on the decisions of the Tribunal. Thus trading loss in this case has been rightly treated as speculation loss by AO and accordingly the disallowance of expenses attributable by AO towards trading activities confirmed - against assessee.
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