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TMI Blog1994 (3) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... While making the fresh assessment, the Assessing Officer disallowed the loss of Rs. 50,928 on account of sale of silver on the ground that it was not understood as to why the silver bar had been purchased by the assessee at higher price when this was not the business of the assessee. According to the Assessing Officer, the alleged purchase and sale was to the same party and it was nothing but a speculation loss and the same could be allowed only to be set off against speculation income. The Assessing Officer further observed that since, there was no profit on speculation, the loss on sale of silver was not allowable. 4. The assessee appealed to the CIT(A). In para 3 of the order, the CIT(A) has recorded "that in order to find out the trut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording to the learned counsel, clearly establishes that the delivery by hand was given as a normal practice of the Sarafa market and there was nothing abnormal in not incurring any expenditure on haulage at the time of purchase and sale of the silver bar. According to the learned counsel, the assessee did produce evidence in support of the claim that the transaction had been entered between the assessee and M/s H. Narayanan Co. in the normal course. The sale of the silver bar was also made in the normal course of business. The payment had been made by payees account cheque and the delivery of the silver bar had also been effected. The transactions were duly supported and affirmed by the other party. The assessee has traded in silver in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n upward trend in the prices of silver. However, after the purchase of silver by the assessee, the prices have gone down. The assessee has sold the silver bar on29th March, 1980at Rs. 2,580 per kg. As per the ready reckoner, the price as on31st March, 1980was Rs. 2,655 per kg. The mere fact that no haulage was debited to the books of account at the time of purchase and sale of silver does not disprove the claim made by the assessee that there was actual delivery of silver bar at the time of purchase as well as at the time of sale. The assessee having furnished evidence before the Assessing Officer as well as before the CIT(A), the authorities, in our view, were not justified in ignoring the same and taking a view on the basis of suspicion. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame of Shri B.N. Mathur, a trustee. The loss was treated as a fake transaction, with a view to reduce the income of the trust. The Assessing Officer further held that the loss was speculative loss and could be allowed against speculation income. Since, there was no speculation income, the Assessing Officer held that the loss could not be allowed. 11. The assessee appealed to the CIT(A) and explained that the purchase and sale of shares was authorised by the trust deed and that there have been number of transactions in the purchase and sale of shares in subsequent years. In this connection, evidence was also furnished before the appellate authority. With regard to registration of the shares in the name of the trustee it was explained that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1980, in which it was stated that with reference to letter dt.23rd Dec., 1979, from the trustees, the shares under consideration had been registered and transferred in the name of Shri B.N. Mathur. The learned CIT(A), accordingly, observed that these shares could not be in the custody of the assessee on23rd Dec., 1979, because after their sale on23rd Sept., 1979, they had been repurchased only on12th Dec., 1979. According to the learned CIT(A) the assessee was not able to explain the discrepancy. 13. The learned counsel for the assessee contended that the assessee had purchased the shares and agreed to sell the same to a party. However, the delivery of these shares could not be given because of a defective title. These shares were retur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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