1978 (2) TMI 85

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....e two references, though relate to separate assessees, raise two identical questions and, therefore, they may be conveniently disposed of by a common judgment. For the purpose of answering the references, we may refer to the statement of the case in R. C. No. 165/76 and the questions referred therein. This reference is at the instance of the revenue and relates to the assessment year 1968-69. T....

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....The other contracting party, M/s. Mudiam Oil Company, received that amount on February 16, 1968, evidenced by a receipt passed by it. It is recited in that receipt : " The 1,000 (one thousand) groundnut bags (tax paid) were purchased by you from us on 4-11-1967, at the rate of Rs. 358 per kandi. But, since we settled by mutual consent today without reference to the delivery, at the rate of Rs. ....

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....arising out of that particular transaction cannot be deemed as a speculation loss in order that it must be separately treated without being set off against other profits. In that view, the appeal was allowed. Hence, at the instance of the revenue, the following two questions were referred : " (1). Whether, on the facts and in the circumstances of the case, the transaction that resulted in loss ....

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....main question which requires to be answered. The fact that the transaction was a speculative transaction will not, by itself, render it a speculative business. To constitute a speculative business, there should be more than one speculative transaction carried on by an assessee so as to constitute a business. It is only then that business will be regarded as a speculative business. Explanation 2....