2009 (12) TMI 619

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..... Rano Jain, chartered accountant represented for the assessee and Shri Kishore B, senior Departmental representative represented for the Revenue. 2. It was submitted by the learned authorised representative that the assessee did not wish to press Ground No. 5 in the assessee's appeal and consequently, the same is dismissed as not pressed. 3. In respect of the merits, it was submitted that the assessee is a company, which is doing the business of trading in shares as also earning brokerage/commission on the purchase and sale of shares. It was the submission that during the year, the assessee had claimed net loss to the profit and loss account on account of share trading at Rs. 34,99,611. It was the submission that in the course of ass....

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.... particulars of such income. It was the submission that it was only on account of the Explanation to section 73 of the Act, which is a highly debatable provision that the loss as incurred by the assessee has been treated as speculation loss and the set off has been denied against the business income of the assessee. It was the submission that the provisions of the Explanation to section 73 provided for a deeming provisions and on such deeming provisions, penalty was not exigible. He placed reliance on the decision of the hon'ble jurisdictional High Court in the case of CIT v. Auric Investment & Securities Ltd. [2009] 310 ITR 121(Delhi) to support his contention wherein it was held on similar treatment of the business loss as speculation los....

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....not talk of the Explanation to section 73 being applicable. The trial balance in respect of the trading of shares quantifying of loss of Rs. 34.99 lakhs was also placed before the Assessing Officer. A perusal of the assessment order shows that the Assessing Officer has invoked the provisions of the Explanation to section 73 of the Act to treat the loss incurred by the assessee on account of self-trading in the shares to an extent of Rs. 37,40,568 as speculative loss. A perusal of the reply as filed by the assessee in the course of assessment proceedings also explains the reasons given by the assessee for the non-applicability of the Explanation to section 73 of the Act. The fact that the assessee has incurred a loss is not disputed The quan....