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2016 (10) TMI 842 - AT - Income TaxLoss from trading in commodities - whether is a speculative transaction within the meaning of Explanation (2) to Section 28 r.w.s. 43(5)(d)? - Held that:- As seen from the transactions and from the provisions of the Act, we are of the opinion that the transactions involved are certainly speculative in nature as per the mandate of Section 43(5). Since nothing was brought on record that the said transactions do not come within the exceptions provided in the section, even though, the same are business transactions, they have to be considered as a separate speculative business and the loss so arrived at is to be considered as speculative loss. However, we are unable to appreciate the order of the CIT(A) in directing the AO to treat the profit from business of income again as total income when AO himself has treated an amount of ₹ 18,16,952/- as speculative loss. Even the AO in our opinion has wrongly considered the amount. The gain on trading in stock futures is also from the speculative transactions. Therefore, the net loss of ₹ 13,57,130/- only can be considered as loss from the speculative transactions. Therefore, we modify the orders of the AO and CIT(A) to the extent of computation of loss. AO is directed to treat only an amount of ₹ 13,57,130/- as speculative loss and the balance loss claimed by assessee should be treated as business loss. AO is directed to modify the orders accordingly.
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