TaxTMI 
TaxTMI 
TaxTMI 
2016 (6) TMI 1156
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....he loss of Rs. 2,41,25,719/- shown by the assessee as business loss, as against speculation loss as treated by the Assessing Officer. 3. The facts concerning the dispute in question and the observations of the ld. AO relevant to the issue are depicted in paragraph Nos. 4.3 & 4.4 of the Assessment Order which read as under:- "4.3 A perusal of the B/S and the P&L A/c of the assessee shows that the assessee is dealing mainly in the trading of shares. Also parts of its shares are shown as investment and are accordingly charged to tax under the head "Capital Gains". During the year under consideration the assessee had purchased shares worth Rs. 45.16 Crores. The said shares were then sold off for Rs. 41.97 Crores, thereby incurring net loss u....
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....is contention of the assessee has been perused and has been found to be not acceptable. The explanation starts with the words 'Where any part of the business of a company". In the instant case the whole of the business of the assessee is to trade in shares. The words "any part" has been wrongly and mischievously been interpreted by the assessee. That the whole includes any part is a part of introductory logic. The contention of the assessee that when the whole of its business activity in trading in shares the provision would not apply is therefore wrong. Any part would certainly include the whole part. It would be important to point out that the Explanation has been inserted in the Income tax Act by the Taxation Laws (Amendment) Act, 19....
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....e carefully considered the assessment order and the submission filed by the appellant. The Assessing Officer has treated the business loss of the company as peculation loss by applying Explanation to Section 73. The facts show that the appellant is dealing mainly in trading of shares which is clearly evident from the balance sheet and profit and loss account. The AO has also recorded this fact in the assessment order. The appellant has submitted that it was in the business of trading in shares and securities and had incurred loss in that and, therefore, Explanation to Section 73 could not be applied. The trading in shares were the main object of the appellant company. Besides this, the appellant had income of Rs. 54.78 lacs in the form of f....
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....rrying on the speculation business. The use of word 'or' between the comas clearly changes the categories which have been mentioned in the explanation. The companies mentioned before the word 'or' are exempted from the deeming fiction as that category starts with the words 'other than the company'. The companies mentioned after the word 'or' are covered by the deeming fiction as it does not begin with the exclusion clause. In view of the above analysis, I am inclined to agree with the submission of the appellant. The appellant is doing the business of trading in shares and securities and is also having income from other sources and, therefore, Explanation to Section 73 will not be applicable in the case of the ....
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.... in the case of Fiduciary Shares & Stock P. Ltd vs. ACIT in ITA No.321/Mum/2013, wherein the ITAT, by applying the Rules of Interpretation and considering the Hon'ble Bombay High Court judgment in the case of Prasad Agents (P) Ltd, reported in 333 ITR 275 (Bom), it was held that this amendment is retrospective in nature, by following observations:- "5.6.10 We have carefully perused the decision of the Hon'ble Bombay High Court in the case of Prasad Agents (P) Ltd. in 333 ITR 275 (Bom) and are of the humble opinion that the decision/finding rendered therein would not apply to the issue in the case on hand since the issue raised before the Hon'ble High Court was whether the loss due to valuation of stock is covered by Explanation to ....
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....ut normal business loss, and hence the same loss can be adjusted against other business income or income from any other sources of the year under consideration. In this view of the matter, we direct the AO to allow the assessee's claim for setting off the loss from 'share trading business' against 'other business income' and income from any other sources during the year under consideration. Since we have allowed the assessee's primary contention/ground, we do not consider it necessary to adjudicate the alternative contention raised by the assessee." 8.2 It is contended that the controversy in question is squarely covered in favour of the assessee by the just and proper interpretation of the amendment which was brou....