TMI Blog2012 (3) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal Nos. 258/CIT(A)-IV/08-09 and 247/CIT(A-IV/09-10 dated 25.03..2010. Assessments were framed by ACIT, Circle-IV, Kolkata and DCIT, Circle-IV, Kolkata u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for Assessment Years 2006-07 and 2007-08 vide their separate orders dated 13.10.2008 and 24.11.2009 respectively. 2. Both the appeals of revenue are delayed by 72 days and 71 days respectively. At the outset, the ld. Counsel for the assessee conceded the position that he has no objection in case the delay is condoned. Since the ld. Counsel for the assessee has conceded the position and in view of the reasons given in condonation petition, we condone the delay and admit the appeals. 3. The first common i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee also advanced unsecured loans to other parties and derived interest income therefrom. According to assessee, shares purchased and held by assessee are investments yielding surplus on sale thereof treated as long term or short term capital gains. The assessee is maintaining regular books of accounts and audited as per the provisions of Income-tax Act as well as Companies Act. AO, in both the years, discussing the provisions of section 73 but without disclosing the facts of the case, held that the declared trading profit is not speculative profit and treated the same as non-speculative profit disallowing speculation loss. Aggrieved, assessee preferred appeal before the CIT(A), who allowed the claim of assessee in both the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n commodity derivatives Rs.66,40,031/- Loss in share difference Transactions ₹ 47,608/- ₹ 66,87,639/- ₹ 46,72,969/- 6.2 It was contended that in assessment year 2006-07, the short-term capital gain is at ₹ 1,04,65,227/- and the gross total income of assessee consists mainly of income assessable under the head Capital gains . Therefore, in view of the Explanation to section 73 of the Act, assessee s loss should have been treated as speculation loss instead of business loss. Similarly, in assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of trading by delivery and losses in terms of the book value. As long as the assessee is carrying on business of trading by way of purchase and sale of shares even if in respect of any financial year there are no transact ions and yet the company has stock- in- trade of shares, the book value will have to be considered for the purpose of considering the prof it and loss in case of speculative business. There can be no doubt that the Explanation to sect ion 73 cannot be read to mean only when there is purchase and sale of shares in the course of the financial year . The Explanation to said sect ion will cover both, shares which are stock- in- trade and shares which are traded in the course of the financial year , for the purpose of consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Rules which have been notified with effect from March 24, 2008, shall apply with effect from the assessment year 2008-09; (vi) Even prior to the assessment year 2008-09, when rule 8D was not applicable, the Assessing Officer has to enforce the provisions of sub-section (1) of Section 14A. For that purpose, the Assessing Officer is duty bound to determine the expenditure which has been incurred in relation to income which does not form part of the total income under the Act. The Assessing Officer must adopt a reasonable basis or method consistent with all the relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record; (vii) The proceedings for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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