9911796707
TMI Blog2011 (4) TMI 1495X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case Ld. CIT(A)-VI, has erred in law in considering that Sec.73 and explanation thereto apply to profit from share trading also and not only to loss. 2. Briefly stated facts of the case as observed by the Assessing Officer are that the assessee is a limited company deriving income primarily from business of share trading and speculation in shares including derivative transactions. It has also earned interest income, income from Mutual funds and dividend during the year. The sole issue in this case is that whether the profits and gains derived by the assesee in the business of purchase and sale of shares constituted profits and gains of speculation business within the meaning of sec. 73 read with explanation thereto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) was not right in holding that the profits earned by the assessee from the business of purchase and sales of shares is in the nature of speculation profit u/s. 73 of the Act. He also contended that the Assessing Officer has rightly held that explanation to sec.73 is not applicable in this case because the deployment of funds in granting of loans as on 31st March, 2006 was substantially more compared with deployment of funds in stock in trade of share trading business. Therefore, the action of the Ld. CIT(A) was not justified in treating the share trading profit of ₹ 18,83,994/- as speculative profit as per explanation below sec. 73 of the Act. He lastly prayed before the bench to set aside the order of the Ld. CIT(A) and restore that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see earned interest income of ₹ 121.07 lacs. As such, explanation below sec 73 is not attracted for the present year and income from delivery based share trading is to be treated as normal business income and not as a deemed speculative activity. Under the above direction, benefit and adjustment of brought forward loss u/s 73 is denied. The Additional C.I.T has not given clear reason to indicate that the company falls in which exception provided in the explanation to the provisions of sec.73. The explanation to sec 73 comes out with 2 exceptions thereto. As per these exceptions, the explanation to Sec.73 is not applicable to following categories of companies; a) a company whose gross total income manly consists of income from ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive statement of fund deployment from 31st March 2002 to 3l March 2008 shows that barring 31st March 2006, in all the years funds deployed in stock in trade were substantially more than deployment of funds in business of granting loans. Further in the abovementioned year, the absolute numeric amount of income from share trading was much more than interest income on loans. The A.O seems to have not verified into the facts of deployment of funds of earlier years and succeeding years relevant to this Assessment Year. The above discussion in my opinion establishes that both the exceptions contained in explanation under sec. 73 are not applicable to the appellant s case. Facts on record show that the appellant s case was not covered by eith ..... X X X X Extracts X X X X X X X X Extracts X X X X
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