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TMI Blog2010 (12) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee company has debited an amount of Rs. 3,02,050 on account of loss on shares. It was seen during the course of scrutiny that the loss had arisen to the assessee on sale/purchase of shares. In the assessee's case only a difference note was sent by the stock broker indicating the loss. It was clearly established that the delivery of shares had not actually taken place in the assessee's case. The difference note was received from M/s. B.K. Khullar & Co. section 43(5) which specifies speculative transactions clearly says that where the transaction of purchase or sale including shares is ultimately settled otherwise than by actual delivery the same shall be a speculative transaction. Income or loss arising to the assessee from such a transaction has to be a speculative income or speculative loss only. The speculative loss of Rs. 3,02,050 is hence not debitable to the P&L a/c of the regular business of the assessee. Consequently this shall be considered separately as a speculative loss. Explanation to section 73 also says that where any part of the business of the company consists in the purchase and sale of shares then the company for the purpose of this section be deemed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member; or The following clause (d) shall be inserted after clause (c) in the provisio to clause (5) of section 43 by the Finance Act, 2005 w.e.f. 1st April, 2006 : '(d) an eligible transaction in respect of trading in derivatives referred to in clause (aa) of section 2 of the Securities Contract (Regulation) Act, 1956 (42 of 1956) carried out in a recognised stock exchange. Shall not be deemed to be a speculative transaction.' On the basis of the findings of facts recorded by the Revenue authorities, not challenged even before us, there is no escape from the finding that the transactions entered into by the assessee in regard to purchase and sale of shares are speculative transactions sections 70 to 79 deal with set off and carry forward of losses from various sources of income section 73 provides that loss computed in respect of speculative business carried on by the assessee shall not be set off except against profits and gains, if any, of another speculation business. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty. Out of the said ALV, deductions permissible are specified under section 24 of the Act. In this case, the rental value is not disputed. It is also not disputed that deduction of commission does not fall within the specified deductions under section 24 of the Act. It is also pertinent to mention that section 24(1) provides deduction equal to 30 per cent of the annual value without assessee having to establish the incurring of any expenditure. Thus, the expenditure which is incurred by the assessee can be said to be covered under the statutory deduction allowed to the assessee. Since the legislature in its wisdom has not provided any separate deduction on account of commission/brokerage paid to the property dealers, the CIT(A), in our view, was not justified in allowing the deduction to the assessee. We are fortified in our view by the decision of Delhi Bench of the Tribunal in the case of Piccadily Holiday Resorts Ltd. v. Dy. CIT [2005] 97 TTJ (Delhi) 362 : [2005] 278 ITR 154 (Delhi)(AT) : [2005] 94 ITD 267 (Delhi). For the reasons given earlier by us in this regard and respectfully following the aforementioned decision of the Delhi Bench of the Tribunal, we restore the disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch question is raised at the earliest opportunity, the other side can lead evidence which it may not be able to do if such a question is raised for the first time before the appellate authority. Of course, there can be no total bar on such question being allowed, if interest of justice so requires. In National Thermal Power Ltd.'s case (supra) it has not been laid down that in every case a question of fact can be mechanically allowed to be raised for the first time. The Madhya Pradesh High Court in CIT v. Premium Capital Market & Investment Ltd. [2005] 275 ITR 260/[2006] 151 Taxman 194 held that question of validity of notice may not be allowed to be raised for the first time in appeal. Subsequent legislative amendment adding section 292BB supports this principle. The question has, thus, to be answered against the assessee. 8. As regards question (ii), learned counsel for the assessee submits that the income of the assessee mainly being under the head of income from property, the assessee was not covered by Explanation to section 73 and in such a situation the assessee could set off loss in speculative transactions against income from house property. The bar against set off of lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction' 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 for actual delivery of goods manufactured by him or merchandise sold by him; or (b) a contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuations; or (c) a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member; or (d) an eligible transaction in respect of trading in derivatives referred to in clause (aa) of section 2 of the Securities Cont ..... 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