TMI Blog2016 (12) TMI 1482X X X X Extracts X X X X X X X X Extracts X X X X ..... ve grossly erred in treating the trading loss as a speculation loss. Without prejudice to our aforementioned findings and for the sake of the completeness of adjudication on the facts in hand, provisions of Section 73 as mentioned hereinabove do not apply at all. Since the assessee has not set off the alleged speculation loss from the business profit but in fact has set off business loss from the alleged speculation profit. The transactions of the assessee do not fit into the definition of speculation transaction given u/s. 43(5) of the Act (supra). We find the order of the First Appellate Authority erroneous and are accordingly set aside. The A.O. is directed to allow the set off of losses as claimed by the assessee. - Decided in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness loss came to be ₹ 37,18,167/-. 4. Ld. CIT (A) erred in law and on facts by invoking provisions of section 73 ignoring fact that the loss incurred by the appellant is from normal delivery based transactions in shares and not in derivatives. Ld. CIT (A) ought to have accepted returned loss. 5 6 Ld. CIT (A) ought to have appreciated properly and considered judicially, the submissions made before him before passing the final order and ought to have allowed appeal in toto. 7. Levy of Interest u/s 234A, 234B 234C is not justified. 3. The assessee is running a proprietary concern by the name Bhansali Bulions. He is also doing trade in securities in his individual name. The accounts of the personal business in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- 3.1.1 The above submission of the assessee was compared with the actual trading results in this firm. The profit of ₹ 99,26,445/- shown above by the assessee is a mirage created by him which has nothing to do with reality. The net result in the speculative transactions of securities in M/s. Bhansali Bulion was a huge loss of Rs.1,48.20,872/- and not a profit of ₹ 99,26,445/- as seen from the following extract: Particulars Amount Particulars Amount Opening Stock 1,07,60,800 Sales 23,12,50,857 Purchase 23,53,10,929 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,167/-. 9. At this juncture, it would be pertinent to consider the provisions of Section 72 vis- -vis provisions of Section 73 of the Act:- Section 72 enumerates provisions of Carry forward and set off of business losses. 72 [(1) Where for any assessment year, the net result of the computation under the head Profits and gains of business or profession is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so set off or, where he has no income under any other head, the whole loss shall, subject to the other provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in respect of a speculation business shall not be set off except against profit and gains of another speculation business. 11. At this point, let us consider the definition of speculation business as given in section 43 of sub-section (5) of the Act and the same reads as under:- (5): speculative transaction 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this cannot be considered as a speculation loss. We, therefore, do not find any error in setting off of loss with the profits by the assessee. 13. The revenue authorities have grossly erred in treating the trading loss as a speculation loss. 14. Without prejudice to our aforementioned findings and for the sake of the completeness of adjudication on the facts in hand, provisions of Section 73 as mentioned hereinabove do not apply at all. Since the assessee has not set off the alleged speculation loss from the business profit but in fact has set off business loss from the alleged speculation profit. 15. However, as mentioned elsewhere, the transactions of the assessee do not fit into the definition of speculation transaction given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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