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2016 (7) TMI 539 - ITAT KOLKATADeemed speculation loss u/s 73 - assessee is a member of National Stock Exchange and conducts trading in listed shares and securities - CIT(A) deleted the addition - Held that:- Both in share broking as well as in proprietary share trading, the underlying business transactions giving rise to income involved only purchase and sale of shares of other companies and therefore in terms of Explanation to Section 73 of the Act, the entire business of the stock broker assessee came within the ambit of Explanation to Section 73 of the Act. We find that once these profits (i.e 97,70,575 + 8,76,950 + 60,12,948) are set off with the loss incurred on share trading business, there would be only resultant gain from speculative business and hence there would be no scope to apply the provisions of Explanation to Section 73 of the Act in the absence of speculation loss. We are in agreement with the arguments advanced by the ld AR that in the case of a stock broker, there is a common terminal, one membership of the stock exchange, common bank account and the common work force with the help of which the business of proprietory trading as well as trading on behalf of the clients are conducted. Therefore it could be safely concluded that the entire business of the stock broker constituted as one single composite indivisible business and therefore income or loss cannot be artificially bifurcated. The provisions of Explanation to Section 73 of the Act would not be applicable in the instant case in the absence of speculation loss if consolidated business income is considered and accordingly we find no infirmity in the order passed by the ld CITA on this issue Alternatively, even if Explanation to section 73 is to be applied, we hold that the assessee’s case falls under the exception provided in the first limb of Explanation to Section 73 of the Act where the gross total income of the assessee comprises of income from other sources which is much more than the speculation loss of ₹ 1,02,12,277/- - Decided in favour of assessee
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