TMI Blog2009 (5) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... these appeals have been filed by the same assessee and are arising from the common order of the CIT(A) on similar issue, so they are being disposed of by a common order for the sake of convenience and brevity. 2. The main grounds raised by the assessee is that the CIT(A) failed to appreciate that the transactions executed by the assessee were not speculative in nature but on the contrary were in the nature of jobbing/arbitrage with in the meaning of Sec.43(5) of the IT Act. 3. The assessee is a member of Bangalore Stock Exchange. In the assessment year 2004-05, it incurred loss and same were carried forward and set off against the income for the assessment year 2005-06 treating the loss as business loss. The AO treated the loss as spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find considerable merit in the argument advanced by the counsel, Mr.Parthasarathi. Clause (c) of Sec.43(5) says that any contract entered into by a member with another member of the stock exchange, which transaction is in the nature of jobbing or arbitrage to guard against 1ss which may arise in the ordinary course of the business of the member, such transaction shall not be deemed to be a speculative transaction. As observed above, in the remand report dated 8.11.05, the AO has accepted that the transactions in which the assessee has suffered losses are in the nature of jobbing and arbitrage and are duly covered by proviso(c) to Section 43(5) of the Ac. Section 73 will come into operation only when a transaction is found to be a speculat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss computed in respect of a speculative business carried by the assessee shall not be set off except against profit gains of another speculation business. Therefore, the transaction must be leading to a speculation business or activity and the result of it must be a loss. On satisfaction of both these conditions, Section 73 will come into operation. In fact, proviso (c) to Section 43(5) clearly shows that transactions in the nature of jobbing or arbitrage are not to be considered as speculative transaction. Therefore, when a transaction is not to be treated as speculative transaction, loss suffered out of the transaction by assessee would be a business loss. It has to be allowed as such. The AO is directed to allow the claim in question f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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