TMI Blog1976 (4) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... diture or a speculation loss which cannot be set off except as against speculation profit. 2. The assessee is a registered firm engaged in the business of manufacture and sale of castor oil on wholesale. During the asst. yr. 1973-74, the assessee entered into 4 contracts with Hindustan Lever Ltd. for the sale of castor oil. Out of the four contracts, three contracts were completed by giving deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the amount paid by the assessee was not to be treated as a speculation loss and he directed this sum to be treated as an allowable expenses. Hence the appeal by the Revenue. 3. The learned Departmental Representative contended before us that inasmuch as the assessee failed to deliver the goods contracted, the transaction comes within the definition of the term speculative transaction as embo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business. 5. On hearing the rival contension and in view of the latest trend of the Madras High Court and Supreme Court decisions, the transaction is clearly a speculative one and hence it is a speculative loss which cannot be set off against the normal business profits. 6. It is admitted that the assessee was not able to delivery the entire 20.76 tons of castor oil agreed to be sold. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Pioneer Trading Co. Pvt. Ltd. 70 ITR 347 (Cal). 7. The Madras High Court in the two cases cited above and especially in the case reported in 96 ITR 353 (Mad) had elaborately discussed this issue and had held that s. 43(5) of the Act dispenses with all other formalities except that there must be actual delivery or transfer of the commodity when the contract is settled. The Madras High Court dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat out of the four contracts, the assessee completed three contracts will not take away the nature of the transaction in the fourth contract inasmuch as no delivery had been effected in the contract in question and the settlement was effected otherwise than by delivery and long after the delivery time was over. Under such circumstances, the contention of the learned Departmental Representative is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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