TaxTMI 
TaxTMI 
2015 (1) TMI 235
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....pra). The ld.counsel for the assessee submitted that the Tribunal order requires to be rectified and, accordingly, the order may be modified. She submitted that the ratio laid down in the judgement of Hon'ble Bombay High Court in the case of CIT vs. Lokmat Newspapers (P) Ltd. (322 ITR 43) has escaped attention of this Tribunal. She submitted that non-consideration of this case-law as relied tantamount to mistake apparent from record. 3. On the contrary, the ld.Sr.DR strongly opposed the miscellaneous application filed by the assessee and submitted that there is no mistake apparent from the record. He submitted that the assessee is trying to get the Tribunal order reviewed under the garb of rectification of mistake. 3. We have heard ri....
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....f P/B Profit/Loss on Purchase/Sale of Shares. Profit on sale of shares Rs. 21,949,309/- Loss on sale of shares Rs.(8,237,695/-) During the year under consideration the applicant has earned net profit of Rs. 1,37,11,614/- from share trading activity. This factual aspect was before both the lower authorities as well Hon'ble ITAT. (Reproduced by ld.CIT(A) in Para 4.3 on page 15 of the order) AO invoked explanation to section 73 of the Act to treat loss incurred on share trading activity as 'speculation loss' ignoring the facts on record that the applicant had in fact earned net profit of Rs. 1,37,11,614/- that would not attract provisions of explanation below section 73 of the Act. 3. The applicant offered profit/loss on sale ....
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.... the submissions of the assessee, it is noticed that in the order dated 18/04/2013, there is a typographical error which requires to be rectified as under:- In first paragraph : The Assessment Year mentioned as 2006-07 instead of AY 2008-09 and the same is hereby modified as AY 2008-09. 3.2. Now, coming to the submission of the assessee, we find that ld.CIT(A) allowed the claim of the assessee by following the judgement of Hon'ble Bombay High Court rendered in the case of CIT vs. Lokmat Newspapers (P) Ltd. Reported at 322 ITR 43. In the case in hand, the AO has rejected the submissions of the assessee by observing as under:- "5.2. The assessee's counsel relied upon the submission made by the assessee vide its letter dated 24.11.2....
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....t is mentioned that netting is to be done. In these circumstances, it is held that the loss incurred by the assessee on purchase and sale of shares at Rs. 82,37,695 is nothing but a speculative transaction. The assessee is not allowed set off of this loss against any income during the year. Penalty proceedings u/s.271(1)(c) of the Income-tax Act, 1961 are separately initiated. [Disallowance - Rs. 82,37,695] 3.3. The undisputed fact remains that the AO has treated the loss arising out of the sale of shares as speculation loss, but has not allowed set off of the same loss against the profit earned from sale of shares. Our attention is drawn to the judgement of the Hon'ble Bombay High Court rendered in the case of Lokmat Newspapers (P) L....
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....ll be deemed to be carrying on a speculation business to the extent to which the business consists of purchase and sale of such shares. Whether or not it is a profit or loss that has resulted from carrying on such business, is a consideration which is alien to the meaning of what constitutes a speculation business by the Explanation to s. 73. Once an assessee is deemed to be carrying on a speculation business for the purpose of s. 73, any loss computed in respect of that speculation business, can be set off only against the profits and gains of an other speculation business. Similarly, for the purposes of sub-s. (2), the loss in respect of a speculation business which has not been set off either in whole or in part, can be carried forward a....
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.... as under:- "4.3 I have considered the appellant's submissions and the AO's observations. From the details submitted by the appellant's it is seen as per the grouping schedule 15 of the profit and loss account, the profit on account of sale of shares is Rs. 21949309 and loss on account of sale of shares of Rs. 8237695. The appellant is having business income greater than the income from other sources or capital gain income and hence the income earned by it on account of sale and purchase of shares is to be treated as income earned from speculative transactions as per the provisions of explanation to section 73. Also such a situation, both the profits as well as losses incurred on account of trading in shares become speculative ....