TaxTMI 
TaxTMI 
2004 (10) TMI 269
X X X X Extracts X X X X
X X X X Extracts X X X X
....sorbed long-term capital loss of Rs.6,69,990 pertaining to the assessment year 1994-95. The details are as under: - ------------------------------------------------------------- Sl. Name of the No. of Period of holding No. company shares ------------------------------------------------------------- 1. Himachal Futuristic 500 30-7-2000 to 7-8-2000 2. Global Tele Systems 400 7-8-2000 to 14-8-2000 3. Square D Software Ltd. 800 21-8-2000 to 11-9-2000 (500) & 18-9-2000(300) 4. Himachal Futuristic 300 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ise than by the actual delivery or transfer of the shares or scrips, and as such the transactions of sale and purchase of shares cannot be regarded as speculative transactions as defined under section 43(5) of the Act. It was further clarified that the shares purchased and sold by the assessee were duly transferred in the assessee's broker's D-Mat A/c, and as such it could not be said that the share transaction on the floor of the Stock Exchange was settled otherwise than by the actual delivery or transfer of the shares and scrips. He further contended that the transfer of scrips or shares to the assessee's broker's account is amounted to the transfer to the assessee herself. 7. The ld. D.R., on the other hand, contended that the word "actual delivery", used in section 43(5) of the Act should construe as to delivery of the goods or scrips to the assessee himself and not to anybody else. He further contended that the shares were not transferred in the assessee's own D-Mat A/c. and, therefore, the authorities below was very much justified in treating the transaction of sale and purchase of shares as speculative transaction within the meaning of section 43(5) of the Act. 8. We h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....question were purchased and sold by the assessee through the assessee's broker as per the instruction of the assessee and the transfer of the shares was made in the D-Mat A/c of the broker. The Assessing Officer as well as the ld. CIT(A) has rejected the assessee's claim only for the reason that the delivery of the shares were not made to the assessee directly but the same were transferred in the D-Mat A/c. of the assessee's broker. In the case on hand, it is not in dispute that the contract was settled by the transfer of shares in assessee's broker's D-Mat A/c. meaning thereby that the contract for the purchase and sale of shares was settled by the actual delivery or the transfer of the shares and not otherwise. A contract can be taken to have been settled otherwise than by actual delivery or transfer of the goods whereunder the original contract there is an obligation to deliver and transfer the goods and delivery or transfer is not effected but the contract is brought to an end by some other method other than delivery or transfer of the goods. In the present case, it is not the case of the Revenue that the contract of sale or purchase of shares was brought to an end otherwise th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t A/c. is not in dispute. It is, therefore, to be seen as to whether the transfer of shares in assessee's broker's D-Mat A/c. can be construed to mean that the contract of sale and purchase of shares was settled otherwise than by the actual delivery or transfer of the shares. There is nothing suggested in the provisions of section 43(5) of the Act that the words "actual delivery or transfer of commodity or scrips" is restricted to the delivery or transfer to the assessee only. The words "actual delivery or transfer" is not restricted to the delivery or transfer to the assessee, it could be to his agent. If the contract of sale and purchase of shares is settled by way of accepting actual delivery or transfer of the goods or scrips by the agent, then it would be construed that the contract for sale and purchase of goods or shares has been settled not otherwise than by the actual delivery or transfer of the commodity or scrips. 10. Having regard to the undisputed facts narrated by the Assessing Officer, and by the ld. CIT(A) in their respective orders and to the certificate given by the broker, it is clear that the transaction of purchase of shares by the assessee through the broke....
X X X X Extracts X X X X
X X X X Extracts X X X X
....case of actual delivery of goods which was taken by the assessee at Bombay instead of Kishangarh. So far as the transaction is concerned, we are satisfied that the provisions of section 43(5) were not at all attracted. It was a case where purchase of goods was actually made and the sale thereof was also effected during the period. The Bombay party has acted as an agent in taking the delivery of the goods and it is not a transaction in which the contract for the purchase or sale of any commodity was settled otherwise than by actual delivery. The word "actual delivery" is not restricted to the delivery to the assessee. It could be to his agent and the fact that the carrying charges for 52 days were realised, makes it clear that the goods remained at Bombay on behalf of the assessee and, therefore, the provisions of section 43(5) are not applicable." 12. A reference may be made to the decision rendered by the Hon'ble Andhra Pradesh High Court in the case of CIT v. Lakshminarayana Trading Co. [1996] 219 ITR 90 wherein it has been held as under: - "From the above discussion, it follows that where the nature of transaction entered into between the parties is such that under the con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o Rs. 22,479, inasmuch as, the assessee has failed to establish and prove that these expenses were incurred wholly and exclusively for the purpose of business. This issue is, therefore, decided against the assessee. 18. Ground No. 4 is against the disallowance of Rs. 23,960 out of telephone charges. 19. We have heard both the parties and have gone through the orders of the authorities below. The disallowance of Rs. 23,960 was made by the Assessing Officer as because it was related to the mobile telephone which was incurred by the assessee over and above the telephone charges of Rs. 28,309. He further pointed out that the claim in this year is 5.34 times more in comparison to earlier years. The ld. CIT(A) confirmed the Assessing Officer's action saying that there was no necessity of mobile telephone, inasmuch as, the gas cylinders are distributed by the assessee as per the norms where the use of the mobile phone was not at all necessary. We have gone through the respective voucher and find that the mobile telephone connection has been obtained in the name of the assessee's business concern. It is not in dispute that house of the mobile telephone by the public at large has been....