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TMI Blog2018 (9) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... which were general in nature. This set off was allowed by the Assessing Officer at the first instance. The matter was taken up in exercise of revisional jurisdiction by the Commissioner under Section 263 of the Income Tax Act, 1961. In the order passed under the aforesaid provision, the revisional authority opined that setting of loss by the Assessing Officer ought not to have been allowed in respect of speculation profit in the absence of specific finding by the Assessing Officer on that count. The revisional authority held and directed / "The issue arising for determination in the instant proceedng is whether the A.O. had made the enquiries which were prudent to be made in the given facts and circumstances of the case before accepting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal and was successful. The Tribunal found that inquiry was conducted in a proper manner and observed in its decision under appeal / "During the course of assessment proceedings u/s 143(3) of the Act the AO issued notice dated 28.02.2014 in which the AO specifically called upon the assessee to furnish the details of the loss from derivative trading of Rs. 2,44,55,976/-. The assessee vide its reply to the aforesaid notice furnished the ledger of loss from derivative besides contract notes in respect of transactions in derivatives carried out by the assessee. The details so filed by the assessee are at pages-55 to 57 of the assessee's paper book. The assessee filed the aforesaid details before the AO and in the order sheet entry of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would appear that the activities appearing in Clauses (a) to (c) are not to be deemed to be speculative transactions. Therefore, this comes within the category of deemed business which is however distinct and separate from any other business. Now, the question is, whether loss arising out of such deemed business can be set off against the profit arising out of other business or businesses which may for clarity be called proper business. Under section 70 of the Act, the assessee is entitled to have the loss set off against his income from any other source under the same head unless otherwise provided. Therefore answer to the question is that the assessee is entitled to have the loss arising out of deemed business set off against the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording to him therefore the enquiries made by the AO in the present case ought to have been carried by the AO to a logical conclusion by holding that the loss in question was a speculative loss and his failure to do so rendered his order erroneous and prejudicial to the interest of the revenue in the light of the decision of the Hon'ble Delhi High Court in the case of DLF Commercial Developers Ltd. (supra). "11. We have given a very careful consideration to the rival submissions. it is clear from the impugned order of the CIT that the ground on which he has come to the conclusion that the order of AO was erroneous and prejudicial to the interest of the revenue was the failure on the part of the AO to make proper enquiries on the derivativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act for remanding the matter to the Assessing Officer was that the records did not reveal any inquiry being conducted by the Assessing Officer. The Tribunal, however, found on fact that such inquiry was made and this appears from the above quoted passages of the decision of the Tribunal. In course of hearing Mr. Mitra contended that the fact that such inquiry was made did not appear from the assessment order and hence, there was no error in the decision of the Commissioner. But that is not the specific factor which had persuaded the Commissioner to remand the matter. As we have already observed, the Commissioner's view was that no inquiry was made. The Tribunal found otherwise. In the event such inquiry was made, we do not think it was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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