TMI Blog2015 (6) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... m. The R.B.I. has granted to the assessee Certificate of Registration u/s.45-IA of the Reserve Bank of India Act, 1934 to commence/carry on the business of non-banking financial institution subject to certain conditions. Under these facts, the authorities below have erred and are not justified in applying the provisions of Explanation to Section 73 of the I.T. Act, 1961. Therefore, the impugned order is hereby set aside and the Assessing Officer is directed not to treat the loss as speculation loss. - Decided in favour of assessee. - ITA No. 514/Ahd/2012 - - - Dated:- 29-5-2015 - G D Agarwal, VP (AZ) And Kul Bharat, JM,JJ. For the Appellant : Shri G C Pipara, AR For the Respondent : Shri Nimesh Yadav, Sr. DR ORDER Per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as the Act ) was framed vide order dated 17/12/2010, thereby the Assessing Officer (AO in short) treated the loss on the sale of shares as speculation loss and to be carried forward and to be adjusted against future speculation profit only. Against the said assessment order, the assessee filed an appeal before the ld.CIT(A), who after considering the submissions of the assessee, dismissed the appeal. Against this, the assessee is further in appeal before us. 3. The only effective ground in this assessee's appeal is against treating the loss on the sale of sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the assessee had no income from any other speculation business shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and- (i) it shall be set off against the profits and gains, if any, of any speculation business carried on by him assessable for that assessment year; and (ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on. (3) In respect of allowance on account of depreciation or capital expenditure on scientific research, the provisions of sub-section (2) of section 72 shall apply in relation to speculation business as they apply in relation to any other business. (4) No loss s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on purchase and sale of shares by applying the Explanation to sub-section 4 of Section 73 of the Act. It has been held by him that since the business of the appellant was purchase and sale of shares was speculative in nature and it can be only set off against the speculative income and, therefore, he assessed the income derived by the appellant on sale of house property during the year under consideration. The appellant has submitted that explanation to subsection 4 of 73 is not applicable to the appellant company as the appellant company was a non - banking finance company and the same is also supported by memorandum and articles of association of the appellant company. In order to clearly understand the issue involved explanation to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he companies mentioned after the word 'or' are covered by the deeming fiction as if does not begin with the exclusion clause. In the light of this explanation, the submission given by the appellant is not found to be acceptable. The appellant has sought to say that even if the principle business is of banking or giving loan, the income from sale and purchase of shares will also not be speculative. The explanation sought to be taken by the appellant is not correct as it is taking the opposite meaning. The appellant has himself stated that it was a NBFC and the business are the one which are covered in the second part of the explanation. Therefore, the deeming provision would be applicable in the case of the appellant. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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