TMI Blog2003 (1) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... t speculation loss cannot be set off except against a speculative profit permissible of being carried forward for being set off in the subsequent years stretching to a period of eight years and not otherwise, unless the test of the Explanation is satisfied, which, in our opinion, is not being satisfied in the present case. - Therefore, the reference is answered in the negative, in favour of the Department. - - - - - Dated:- 22-1-2003 - Judge(s) : D. K. SETH., R. N. SINHA. JUDGMENT D. K. SETH J. -The question to be answered is: "Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was justified in directing the Assessing Officer to compute the total income of the assessee without ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y clear from the said finding that the learned Tribunal had allowed the benefit of the Explanation to section 73 after setting off of the speculation loss. In order to ascertain whether an assessee would be entitled to the benefit of the Explanation to section 73, it is to be examined first whether the assessee comes within the exception provided in the said Explanation. It is to be found out as to how it stands before the benefit of the Explanation to section 73 is allowed. The expression " . . . gross total income consists mainly of income ... chargeable under the heads. . ." used in the Explanation is clear and unambiguous. It gives out the intent of the Legislature. Section 73 restricts adjustment of speculation loss with speculation pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely after computing the income as defined under section 80B(5) of the said Act. Applying the said principle in the present case, we find that there was a loss in the share dealing account, i.e., Rs. 8,98,799. If the same is treated to be a negative profit, then definitely the income from other sources and dividend income (interest on securities) being Rs. 5,73,701 is lesser. Therefore, the main income consists of the business of share trading which is the main object of the assessee. The business income computed after setting off the loss in share trading assessed at Rs. 3,33,670 does not represent the business income since it was arrived at after applying the benefit of Explanation to section 73, namely, setting off the speculative in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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