TaxTMI 
TaxTMI 
2014 (2) TMI 793
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....s.10,35,384/- made on account of treating the share trading loss as speculative loss, in accordance with provisions of Explanation to section 73? [B] Whether the Appellate Tribunal is right in law and on facts in deleting the enhancement made by CIT(A) of Rs.69,230/- made on accoutn of accrued interest on loans given to Dhiren H. Vora?" 2. Question [A] pertains to deletion of Rs.10.35 lakhs (rounded off) made by the Assessing Officer and confirmed by CIT(Appeals) treating the share trading loss of the assessee as speculative loss. 3. Briefly stated the facts are that the respondent assessee is in the business of trading of shares. It also has other sources of income. For the Assessment Year 2000-01, the assessee claimed the loss of....
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.... Officer observed that the assessee company has disclosed interest income as business income and the investment of the assessee company in share business was more than the investment of the assessee company in share business was more than the investment made for earning interest income opined the Explanation to Section 73 was attracted in the case of the assessee. In this view of the matter, he treated the share trading loss of the assessee as speculation loss and not allowed set off for both the year under appeal. The Learned Commissioner of Income Tax (Appeals) confirmed the above action of the Learned Assessing Officer. We find from page-37 of the paper book where copy of ledger account of Abhijay Capital Services that during the Assessm....
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....classification given to by the assessee properly to appreciate the true nature of the interest income so as to assess such income under the proper head of income. From the ledger accounts of the parties as discussed above, we find that during both the year under consideration, the assessee has advanced loan to one party only during the year on which interest was earned by it. In our considered opinion, merely because of advancing of loan to one party alone during the whole year on which was earned, it cannot be held that the assessee was engaged in the business of advancing of loan for earned by the assessee in both the year under appeal are assessable under the head income from other sources. We further observe that income assessable under....
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....that the assessee is engaged in trading of shares from which the loss in question arose is not in dispute. The term speculation business has not been defined, however, term "speculative transaction" is defined in section 43(5) of the Act, which definition, of course, is for the purposes of sections 28 to 41 of the Act. As per the said provision, speculative business means the transaction in which the contract for the purchase and 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. 7. For the purpose of our discussion, we are not concerned with the proviso to the said sub-section. In terms of the said provision, the business....
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.... granting of loans and advances. In such cases, where part of the business of such a company consists in the purchase and sale of shares of other companies, such company, for the purpose of section 73, be deemed to be carrying on a speculation business to the extent to which the business consists of the purchase and sale of such shares. 9. The case of the assessee is that it falls within the exclusion clause of the explanation since the gross total income consists mainly of income which is chargeable under the heads of income from interest on security and income from other sources. 10. When the assessee pointed out that it earned interest income of Rs.13.48 lakhs, the Revenue held that such income must be considered to be a business i....