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TMI Blog1991 (1) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... elivery basis. The ITO and the IAC, however, noted that the transactions of purchases and sales were effected on one and the same day and after passing the relevant entries regarding the purchases and sales the resultant loss had been recorded in the books. They, therefore, held the view that the contracts were settled otherwise than by actual delivery or transfer of the commodity and, hence, the transactions were speculative in nature. The ITO accordingly refused to allow the loss in question to be set off against other income of the assessee. In appeal the CIT(A) agreed with the ITO's findings and conclusions and upheld his order. 3. Mr. K.H. Kaji, the learned Advocate appearing for the assessee has urged that the IT authorities overlo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a transaction in which a contract for the purchase of any commodity, including stock and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrip. The use of the adjective 'actual' qualifying the nouns "delivery" or "transfer" in the language of s. 43(5) clearly indicates the intention of legislature that physical movement of the commodity from the possession of the seller to that of the purchaser should take place in order to constitute actual delivery or transfer of the commodity. Property in the goods may remain with the seller while the property in the goods may pass to the purchaser with the transfer of documents of title to the goods by the seller to the purchaser and/or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um up, we are of the opinion that the phrase "actual delivery or transfer of the commodity" used in the language of s. 43(5) no doubt embraces the concept of 'constructive' delivery or transfer of the commodity within its fold but, as stated above, by the above phrase the physical movement of the commodity from the possession of the seller to that of the purchaser has clearly been intended by the legislature. Therefore, to take a transaction of purchase or sale of a commodity out of the net of 'speculative transaction', as defined in s. 43(5), actual delivery or transfer of the commodity direct or constructive shall have to be proved in the context of periodical or ultimate settlement of the contract for purchase or sale. 8. It seems to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name of . . Sauda Bill/No Seller/Town Bags Rate Amount 11.8.81 27.8.81 Tala Tal. Sah. Khand . . . . 876 Udyog Mandli 50 648.51 32,425.50 . . Ltd./Talala .. . . 24.8.81 31.8.81 Tala Tal. Sah.Khand .. . . 1122 Udyog Mandli 50 495.00 24,750.00 . . Ltd./ Talala . . . 21.8.81 31.8.81 Billeshwar Khand . . . . 4560 Udyog Sah. Mandli . . . . . Ltd./Khodinar 50 600.00 30,000.00 5.9.81 12.9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 521.00 8,857.00 (By Draft Billeshwar) 8.10.81/107 Shashikant Gulabchand Co./Morvi 50 530.25 26,512.50 (D.No.256568 SBI) 12.10.81/109 Dungarmal Dhan Raj/Surendranagar 50 524.00 26,200.00 (Draft No. 1643 Talal) . . 300 . 1,55,712.50 10. The case of the assessee further is that all the 300 bags were sold to seven parties, admittedly on the very same date, on which those were purchased from the sugar factories, as is evident from the above statements. The above facts have been tried to be supported with Dalal's purchi dt. 20th Aug., 1981 showing booking of assessee's order for purchase of 50 bags from Bille ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies and/or alleged purchasers are stated to have been periodically settled. On our appreciation of these facts, as brought on our record, we have no hesitation to hold that the contracts for sale and purchase of sugar bags in this case were settled by the assessee otherwise than by actual delivery or transfer of the commodity direct or constructive purchased and sold. We are thus in full agreement with the IT authorities that the loss in question, not being a business loss and having been occasioned to the assessee in speculative transactions, was not allowable and has rightly been not allowed, to be set off against other income of the assessee. The appeal is devoid of any force and has to be dismissed. 12. Appeal dismissed. - - TaxT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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