TMI Blog1979 (10) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... o s. 24(1) of that Act. The assessee carries on business in gunnies. The total purchase disclosed by the assessee for the year ended June 30, 1960, amounted to Rs. 1,01,51,225 and the total sales during that year were shown at Rs. 1,03,27,208. The purchases and sales included certain transactions with Messrs. Kesardeo Shyamsunder. Under Contract Nos. 96 dated November 11, 1959, 108 dated November 12, 1959, 643 dated April 27, 1960, and 836 dated May 25, 1960, the assessee claimed that 5,700 bales of gunny bags were purchased for Rs. 22,05,000. The assessee says that he sold them to the same party under Contract Nos. 520 dated March 30, 1960, 540 541 dated April 1, 1960, and 610 dated April 19, 1960, for Rs. 19,79,550. The result was a l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified the loss at Rs. 2,25,450. In respect of that transaction the Appellate Tribunal observed that on purchase when the assessee was deemed to have received delivery, the full amount was paid by cheque, and similarly when the assessee sold forward the full sum was also paid through cheque. It referred to the trade usage that cheques were paid when bills were received and on payment thereof the pucca delivery orders changed hands. Therefore, said the Tribunal, in form it was a transaction of delivery for cash, and was not a speculative transaction. At the instance of the revenue, the Appellate Tribunal referred the following question to the High Court at Calcutta : " Whether, on the facts and in the circumstances of the case, the loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 713 and Murlidhar Jhunjhunwalla v. CIT [1969] 73 ITR 727, held that unless the transaction was settled by actual delivery or transfer of the commodity it would be a speculative transaction by reason of Expln. 2 to s. 24(1). Subsequently, in Raghunath Prasad Poddar v. CIT [1973] 90 ITR 140, the Supreme Court took a more liberal view and laid down that if the original transaction of sale and purchase of goods was followed by one or more subsequent contracts in respect of the same goods the original transaction would not be a speculative transaction if actual delivery of the goods sold was effected to the ultimate purchaser of the pucca delivery orders. The restricted view taken by the Calcutta High Court in Nanalal M. Varma Co. (P.) Ltd. [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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