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TMI Blog1980 (8) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... livery orders without actual delivery of goods were not speculative transactions within the meaning of sub-section (5) of section 43 of the Income-tax Act, 1961, and in that view allowing the loss of Rs. 33,738 as trading loss ? " So far as the first question is concerned, it is clearly concluded by the decision of the Supreme Court in the case of Empire jute Co. Ltd. v. CIT [1980] 124 ITR 1. In view of the said decision, we answer question No.1 by saying that the Tribunal was right in holding that the sale proceeds of loom hours constituted revenue receipt and cannot be considered to be capital receipt under the head " Capital gains". Thus, question No. 1 is answered in favour of the assessee. So far as the second question is concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which had carried on business in tea garden tools and requisites and also had acted as agents for selling tea, entered into certain transactions for the purchase of certain jute goods and their sale. The assessee had no godown and had not handled them. Only delivery orders addressed to the mills had changed hands. These transactions had resulted in a loss. The ITO held that the transactions which involved mere transfer of delivery notes and not actual delivery of goods were of a speculative character within the meaning of Expln. 2 to s. 24(1) of the Indian I.T. Act, 1922, the loss incurred could be set off only against speculation profits and since there were no such profits in that year, the loss would be carried forward to be set off ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question was 1959-60, and in the relevant previous year which ended on June 30, 1958, the assessee for the first time in its history had entered into certain transactions in jute. This aspect is important because the learned advocate for the assessee urged that the petitioner assessee was mainly a manufacturer and purchaser of jute goods and the jute goods had remained in the godown of the assessee. The assessee had entered into contracts and performed the contracts by delivering pucca delivery orders. In case of sale and repurchase, there was no actual delivery of goods. We are concerned here with sub-s. (5) of s. 43 of the I.T. Act, 1961, which defines " speculative transaction " and it contemplates that " speculative transaction " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hysical transfer of the goods by handing over the custody of the goods. The fact that this was in one year and this was not the main business would not materially affect the decision in view of the ratio of the principles of the decision of the Supreme Court in the context of the facts of that case, as enunciated by the Supreme Court in Davenport Co. P. Ltd. v. CIT [1975] 100 ITR 715. Learned advocate for the assessee drew our attention to the Bench decision of the Andhra Pradesh High Court in the case of Addl. CIT v. Maggaji Shermal [1978] 114 ITR 862, where the assessee had entered into contract with another dealer on November 4, 1967, for the purchase of 1,000 bags of groundnuts at the rate of Rs. 358 per kandi, delivery of which was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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