9911796707
TMI Blog2017 (4) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment u/s.143(3),on 16/12/2010,determining its income at Rs. 20.52 lakhs under the normal provisions. 2. Effective ground of appeal is about application of provisions of explanation 1 to section 73 of the Act. During the assessment proceedings, the AO found that the assessee had suffered a loss in the delivery-based share trading of Rs. 1.85 crores. He directed it to explain as to why the loss suffered in share trading activity should not be considered as speculation loss as per the provisions of explanation to section 73 of the Act. As per the AO, the assessee did not file any satisfactory reply in that regard. Finally, he held that loss suffered by it had to be considered a speculation loss and was not to be allowed to set off against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not applicable to a company the principal business of which was the business of banking/granting loans and advances, that the main business of the assessee was granting of loans and advances, that the assessee was not covered by the provisions of explanation to section 73 of the Act. He referred to cases of A N Corporation Ltd. (6SOT 458),Jindal Exports Ltd.(2006 ITD129) and Concord Commercial Private Ltd.(94TTJ913) and allowed the appeal filed by the assessee. 4. During the course of hearing before us, the Departmental Representative (DR) relied upon the order of the AO. None appeared on behalf of the assessee, as stated earlier. So, we are deciding the material on the basis of the available material. We find that the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a loss which has arisen in respect of speculation business carried on by the assessee save and except against the profits and gains of another speculation business. The Explanation to section 73 introduces a deeming fiction that where any part of the business of a company consists of the purchase and sale of shares of other companies, such company shall, for the purposes of the section be deemed to carry on speculation business to the extent to which the business consists of the purchase and sale of such shares. The deeming fiction applies only to a company and the provision makes it clear that the deeming fiction extends only for the purposes of the section. The Explanation, however, carves out an exception that it shall not apply to a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly of income which is chargeable under the heads referred to in the Explanation. ..... the gross total income of the assessee was required to be computed, inter alia, by computing the income under the head of profits and gains of business or profession as well. Both the income from service charges in the amount of Rs. 2.25 crores and the loss in share trading of Rs. 2.23 crores, would have to be taken into account in computing the income under that head, both being sources under the same head. The assessee had a dividend income of Rs. 4.7 lakhs (income from other sources). The Tribunal was justified in coming to the conclusion that the assessee fell within the purview of the exception carved out in the Explanation to section 73 and that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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