TMI Blog2005 (1) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... Electrical Industries indulging in the business of electrical goods. During the financial year in question, the assessee also engaged in trading in shares. There was loss incurred by the assessee in shares as already stated and there was a business income from the electrical business which was set off to arrive at net loss of Rs. 14,42,412. Trading in shares by the assessee was examined by the Assessing Officer. One Subramanya Bhat, Manager of M/s. Sunil Agencies, through whom trading in shares was done, was also examined. Some of the Contract Notes for such transactions were examined only to conclude that wherever transactions in shares have taken place, there was no actual delivery of shares. Therefore, the Assessing Officer treated such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r business transactions and are not one where delivery was not involved. The learned counsel for assessee pleaded that the delivery contemplated by the Act could be either actual or implied or constructive. In rapid development of stock business, purchase and sale takes place much on on-line basis without actual physical movement of shares. But the effect of the transaction is not dealing in shares without presence of physical shares. The learned counsel for assessee also filed copies of the Bangalore Stock Exchange Ready Referencer wherein detailed transactions relating to shares are discussed. According to him, now-a-days there can be no transaction without there being physical possession of the shares. The so-called speculation is not pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have carefully considered the rival contentions and gone through the records including the paper book filed at our instance to understand the transactions better. Section 43(5) of the Act reads as under : "43(5) speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips : Provided that for the purposes of this clause ( a )a contract in respect of raw materials or merchandise entered into by a person in the course of his manufacturing or merchanting business to guard against loss through future price fluctuations in respect of his contracts f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock Exchange as well as the consider the copies of detailed Contract Notes produced by the assessee, which according to the assessee, evidences the fact of constructive delivery. The detailed Contract Notes issued by M/s. Sunil Agencies in respect of all the transactions of the assessee may have to be looked into by the Assessing Officer. The Assessing Officer shall therefore re-decide the issue in accordance with law and keeping in view the principle laid down by the Apex Court in the case of Duni Chand Rataria ( supra ). Needless to say the assessee shall be given a fair and reasonable opportunity of being heard in the matter. 6. In the result, the appeal is to be treated as allowed for statistics. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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