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TMI Blog2013 (6) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable in the assessee's case and AO was justified in treating the income on account of brokerage of shares as business income and income on account of trading of shares for itself as speculation income within the meaning of section 73 and explanation thereto of the Act. The AO was further rightly directed to carry forward losses if any as per provisions. On this account AR submitted that AO has not allowed to carry forward of the losses as directed by the CIT(A). This limited issue is restored to the AO with a direction to allow carry forward of losses as directed by the CIT(A) as per provisions of the Act after providing opportunity of hearing to the assessee. - IT Appeal Nos.691 to 694 (PUNE) of 2011 - - - Dated:- 28-3-2013 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceedings applied the provision of explanation to section 73(2) of the Act and treated the share trading business of the assessee as a speculation business. The bifurcation of the income and expenses was made on assumption basis. The final result of P L account was worked out for normal income and speculation income/loss on assumption basis and assessments completed u/s.143(3) or 143(3) r.w.s. 148 of the Act. Matter was carried before the First Appellate Authority, who confirmed the same. Same has been opposed before us. 4. The Ld. Authorised Representative submitted that the CIT(A) was not justified in confirming the orders of the Assessing Officer which were based on assumption about the reconstruction of profit and loss acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee's case. While in Gopal Purohit's case (supra) the issue involved was that of capital gain vis-a-vis business income. In said case the assessee, an individual, was engaged in transaction of shares in dual capacity, i.e., transactions settled otherwise than by actual delivery were returned by assessee as business income and receipts from transactions by actual delivery were returned as capital gains. The Hon'ble Bombay High Court has given the decision in favour of the assessee and Revenue's ground that the entire income needs to be treated as business income was rejected. In the said case, applicability of section 73 and explanation thereto was not the issue. Section 73 and the explanation thereto is a specific provision for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes when an assessee is to be deemed to be carrying on a speculation business for the purpose of the section. The deeming fiction is, therefore, one which arises specifically in the context of the provisions of section 73 and is confined to that purpose alone. The Explanation stipulates that where an assessee is a company whose business consists in any part of the purchase and sale of shares of other companies, it shall be deemed to be carrying on a speculation business to the extent to which the business consists of purchase and sale of such shares. Whether or not it is a profit or loss that has resulted from carrying on such business, is a consideration which is alien to the meaning of what constitutes a speculation business by the Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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