1981 (7) TMI 128

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..... etc. The assessee had entered into an agreement for the purchases of 43 tons of oil cakes with Smt. Usha A. Agarwal of Bombay on 18th Oct., 1973. A similar agreement for the purchase of 43 tons of oil cakes was entered into with Shri Suresh K. Agarwal on 23rd Oct., 1973. The contracts were settled on 20th Oct., and 24th Oct., 1973 respectively by paying the difference of Rs. 10,750 to each of the .....

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..... no fraud or wilful negligence on the part of the assessee and thus no penalty could be levied. The ITO did not accept these arguments. He observed that "it was not proved at any stage that the amount of Rs. 21,500 did not represent the loss incurred in the course of speculation transaction and further by not disclosing the loss incurred in this transaction directly by debiting to profit and loss a .....

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..... peculation losses, the assessee was bound to have shown these facts separately in the trading or profit and loss account. As it had not done, penalty was exiginble. He, accordingly, confirmed the levy of penalty. 3. Before us, the ld. Counsel for the assessee stated there was no attempt on the part of the assessee to suppress any material facts. According to the assessee, this was a trading loss .....

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..... Supreme Court had held that profit or loss arising in such transaction was no speculation profit or loss in the case of Rahunath Prasad Poddar (1973) 90 ITR 140 (SC) delivered on 25th April, 1973. This finding was reversed by the Supreme Court in the case of Davonport Co. P. Ltd. 1975 CTR (SC) 235 : (1975) 100 ITR 715 (SC), delivered on 31st July, 1975, which was later to the date of the filing .....

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..... e state of law then existing, the assessee could not also consider that the loss arose from speculation transactions. It would also take support of the latest decision of the Calcutta High Court in (1980) 124 ITR 384 (Calculation). In our opinion, no facts have been suppressed by the assessee or made to appear in a way that the apparent state of affairs was not real. It was for the ITO to examine .....

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