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2015 (2) TMI 361 - HC - Income TaxJobbing and arbitrage - whether be considered as a speculative transaction? - Losses in speculation business - assessee is a share broker and a member of both National Stock Exchange and Bangalore Stock Exchange Ltd - Held that:- Section 73 has no application to a contract entered into by a member of the NSE or Bangalore Stock Exchange, whose business is in trading of shares on behalf of his clients, which is known as jobbing or arbitrage. Any loss which may arise in the course of such business, shall not be deemed to be a speculative transaction. If the nature of the transaction by the assessee is not a speculative transaction at all, then, the Explanation to section 73 of the Act has no application. The loss sustained by the assessee is a business loss which can be set off against the income from the other sources. Therefore, the prohibition under section 73 of the Act is attracted only to set off the loss in a speculative business against the profit from other business, because loss from speculation business should be set off only from a profit of speculation business. Therefore, the Tribunal was justified in setting aside the order passed by the authorities and allowing the claim of the assessee. - Decided in favour of assessee.
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