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TMI Blog2015 (10) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) has erred in concluding that the set off of the speculation loss cannot be allowed in A Y.2006-07 since the Explanation to section 73 has to be applied year and year and the set off of the loss cannot be allowed in the year in case the conditions laid down in the Explanation are not satisfied irrespective of the fact that all the other circumstances when the Explanation to section 73 was applied in A.Y.2001-02 and that in AY.2006-07 are constant. 3. The learned CIT (A) has erred in not allowing the claim of bad debts amounting to Rs. 14,39,878/-. The learned CIT (A) has concluded that the advance given to the broker is of a capital nature, irrespective of the fact that the income derived from the said advance is treated as busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was of speculation nature but current year's profit from share trading is not speculative profit and therefore loss from speculation business cannot be set off against the profit of non-speculation business. Being aggrieved, the assessee carried the matter before the Ld. CIT(A) but the Ld. CIT(A) confirmed the action of AO in denying the benefit of set off of the loss brought forward from assessment year 2001-02. Thus, the assessee filed an appeal before the Tribunal. 5. During the hearing before us, Ld. Counsel on behalf of the assessee company argued that the action of the AO in denying the benefit is contrary to law. The Ld. Counsel submitted that the issue is now no more res-integra, as this issue has been , settled by Hon'ble Jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips, cannot be read into the provisions of section 73 having regard to the plain meaning of the Explanation to section 73. The contention that a loss which arises on account of a transaction of the sale and purchase of shares would constitute a loss from a speculation business for the purposes of the Explanation but that the profit which arises from a transaction involving the actual delivery of shares would not constitute a profit for the purposes of sub-sections (1) and (2) of section 73 in respect of which a set-off can be granted, introduces a restriction into the scope and ambit of the deem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year, the assessee is entitled to set off the Losses carried forward from a speculation business arising out of a previous assessment year." Unquote: 7. Thus, perusal of aforesaid observations of Hon'ble High Court clarifies this principle that once the assessee is carrying on a speculation business and the profits and gains have arisen from that business during the course of the assessment year, the assessee is entitled to set off the Losses carried forward from a speculation business arising out of a previous assessment year. Thus, applying this judgment of the jurisdictional High Court, the assessee is entitled for the set off of the impugned amount of amount of loss brought forward from assessment year 2001-02. No contrary judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the normal course of business and in the interest of justice, and fair play, the assessee should be allowed to claim the same as an expense against his business income. if it is not done so, the assessee would end up in making payment of tax on the profits which have not been earned. On the other hand, the Ld. DR supported the orders of the authorities below and submitted that the assessee is not clear about the provision in which the claim is allowable and requested that the order of the Ld. CIT(A) should be upheld. 11. We have heard both the parties. This fact is not disputed that the impugned amount represents bad debts. The genuineness of the claim has not been doubted. The only objection of the authorities below was that the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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