Fair apportionment of common business expenses between speculative and non-speculative trading upheld as no substantial question of law arose.

Common administrative and business expenses incurred across speculative and non-speculative trading activities may be apportioned on a fair and reasonable basis where the assessee does not prove a different allocation method. Here, the authorities and Tribunal accepted apportionment by turnover and profit, supported by the nature and volume of the business and the absence of contrary evidence. The court found no perversity in those concurrent factual findings and held that the application of section 73 and its Explanation did not give rise to any substantial question of law. The cited precedent did not assist the assessee, and the appeal was dismissed.

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Issues: Whether common administrative and related business expenses incurred in a company carrying on both speculative and non-speculative activities could be apportioned between those activities on a reasonable basis, and whether such apportionment in the ratio of turnover and profit gave rise to any substantial question of law.

Analysis: The assessee carried on trading in shares, gold bullion and commodities, and its books reflected common expenses relatable to both speculative and non-speculative operations. As the assessee did not furnish evidence showing that the expenses should be allocated differently, the Assessing Officer, the appellate authority and the Tribunal adopted a fair apportionment on the basis of the nature and volume of the business. The statutory scheme under section 73 and its Explanation recognises speculation loss treatment in respect of share transactions by a company, and the ratio applied by the Tribunal was supported by the principle that where common expenses are not separately identified, they may be apportioned on a fair and reasonable basis. The Court found no perversity in the concurrent factual findings and held that the cited precedent did not assist the assessee.

Conclusion: The apportionment of common expenses was justified and no substantial question of law arose; the issue was answered against the assessee and in favour of the Revenue.

Final Conclusion: The tax appeal was not entertained and stood dismissed because the concurrent factual findings on equitable allocation of common expenses called for no interference.

Ratio Decidendi: Where an assessee carries on both speculative and non-speculative businesses and fails to demonstrate a different basis of allocation, common expenses may be fairly apportioned on a reasonable basis, and such concurrent apportionment will not ordinarily raise a substantial question of law.

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