2006 (1) TMI 617

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....l, Accountant Member. - This appeal has been filed by the revenue against the order of the CIT(A) dated 26-1-2001 by taking following effective grounds of appeal- "On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in directing to allow set off of speculation loss of ₹ 6,57,195 from business income and not appreciating fact involved with legal provision....

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....urchase. The assessee has not taken the delivery of the shares. The assessee has booked loss of ₹ 6,56,702 on the above transaction. The transaction entered into is of speculative nature and, therefore, constitutes speculative business as per Explanation (2) to section 28. Referring to the definition of speculative transaction as given under section 43(5) that it means transaction in which a....

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....he CIT(A) even did not discuss the provisions of section 43(5) and section 28 read with Explanation (2). The addition was merely deleted on the presumption that looking into the amount of the capital gain which is more than a crore, the assessee should not be treated to have gone for the speculation loss. Thus the order of the CIT(A) must be set aside. 4. Ld. AR on the other hand contended that t....

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....ich were not controverted by the ld. AR. Section 43(5) defines the speculative transaction. According to which the speculation means a transaction in which a contract for the purchase or 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 scrip. No evidence has been produced or brought on reco....