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TMI Blog2010 (2) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... al directed that the loss, as claimed by the assessee, be set off against the regular business income. – held that - even if we assume for the sake of argument that the said transactions amounted to speculative transactions as defined in Section 43(5), the same would be of no help to the revenue inasmuch as Section 43(5) is merely a definitional clause defining as to what a speculative transaction is for the purposes of Section 28 to Section 41 of the said Act. It is only when the speculative transaction, as defined in Section 43(5), matures into a speculative business as appearing in Explanation 2 to Section 28 that any effects would flow from the said definition. In case the speculative transaction, as defined in Section 43(5) of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d distillate and another sum of Rs 5,87,388/- to Kuok Oils and Grains Private Limited, Singapore on account of price difference on the basis of a wash out contract for palm fatty acid distillate. Both the Assessing Officer as well as the Commissioner of Income Tax (Appeals) found the said transactions to fall within the definition of "speculative transaction" as defined in Section 43(5) of the said Act and not amounting to payments on breach of contract. 3. The Tribunal, however, had returned a finding that the loss claimed by the assessee had been wrongly disallowed by the Assessing Officer by applying the provisions of Section 43(5) inasmuch as, according to the Tribunal, the loss had been incurred by the assessee in the regular cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness in terms of Section 73 of the said Act. We find that this aspect of the matter has been dealt with by the Bombay High Court in the case of CIT v. Kamani Tubes Limited: 207 ITR 298. In the said decision, the Bombay High Court, inter alia, held as under:- "On a careful reading of the provisions of sections 72 and 73, Explanation 2 to section 28 of the Act, it is abundantly clear that all these provisions are applicable only to treatment of profits and losses from a "speculation business". There is a perceptible difference between "speculative transaction" and "speculation business". An isolated transaction of settlement of a contract otherwise than by actual delivery of the goods might amount to "speculative transaction" within t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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