TaxTMI 
TaxTMI 
1968 (8) TMI 19
X X X X Extracts X X X X
X X X X Extracts X X X X
....ocedure is as follows : The assessee receives a phone instruction or telegram to buy or sell a certain quantity. Immediately it enters it into its books and informs that party of the sale or purchase having been effected. But as only members can deal with the association, actually no such purchase or sale is made through the association in the name of that particular person, though no doubt there are other purchases or sales in forward transactions by the assessee itself. The dates for settlement as also the rates at which the transactions are entered into are settled. On the relevant date, as per the agreements entered into between the parties, settlement is made, profit either being paid to that party, or received from it, having regard t....
X X X X Extracts X X X X
X X X X Extracts X X X X
...." By its judgment dated September 2, 1964, the High Court answered the question in the affirmative and in favour of the assessee. Section 24(1) of the Income-tax Act, 1922, hereinafter called " the Act provides as follows : " 24. (1) Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year : Provided that in computing the profits and gains chargeable under the head ' Profits and gains of business, profession or vocation ', any loss sustained in speculative transactions which are in the nature of a business shall not be taken into account except to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n by the High Court is erroneous in law and the receipt of commission was a receipt from the business of the assessee as a broker and was not a receipt of income from the business of speculation and therefore the commission should not be assessed under the head " speculation business ". In our opinion, the argument put forward on behalf of the appellant is well-founded and must be accepted as correct. The reason is that there is no element of speculation, whatever, in the commission income received by the assessee. The commission was earned and received by the assessee independently of any fluctuation in the market and no risk was involved in the earning of the commission and so it must be treated as profit from the other business of the as....