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TMI Blog1982 (3) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings, the ITO found that the assessee had shown a loss of Rs. 44,386 in sarson account. The ordinary business of the assessee was in utensils. It was explained to the ITO that the assessee-firm had purchased sarson through Bal Krishan Mohinder Pal, Bega Purana, and the said sarson was sold to Devi Dass Gopal Krishan, Moga. In this transaction, the assessee suffered a loss of Rs. 44,386. Since it was a single transaction in which the loss arose, the ITO asked the assessee to show cause why the loss should not be treated as loss in speculation because the main business of the firm was purchase and sale of utensils. After obtaining the explanation of the assessee, the ITO found that the assessee had no godown on rent. He also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that though the Chandigarh Bench of the Tribunal had taken a view in IT Appeal No. 984 of 1976-77 in the case of Arore, Cotton Co. that a single transaction cannot constitute speculative business, yet the issue is to be examined afresh in view of the submissions that follow. It was contended by Shri Khichi, junior authorised representative, that the judgment of the Bombay High Court in the case of CIT v. India Commercial Co. (P.) Ltd. [1977] 106 ITR 465 is not against the revenue as such because the ratio of the judgment is not against the revenue. The observations that have been relied on in the earlier case and in the case of the assessee are only by way of obiter in that case. It was further submitted that though the judgment of the An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentative invited our attention to the judgment of the Punjab and Haryana High Court in the case of Nand Lal Sohan Lal v. CIT [1977] 110 ITR 170 (FB) with particular reference to the observations made by Shri Chinappa Reddy, J., as he then was, that it is true that a taxing provision must receive a strict construction at the hands of the courts and if there is any ambiguity, the benefit of that ambiguity must go to the assessee. But that is not the same thing as saying that a taxing provision should not receive a reasonable construction. In every case it is the duty of the judge to consider which is the more reasonable view and accept that which is more reasonable in view of this. He submitted that even if the different High Courts have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness for which there should be more than one speculative transaction carried on by the assessee as per Explanation 2 to section 28. Referring to the judgment of the Madhya Pradesh High Court, relied on by Shri Khichi in support of his arguments, it was submitted that in any case, the judgments cited by the revenue itself show that on the interpretation of provisions of Explanation 2 to section 28 with regard to the "speculative transaction", there are two reasonable views possible and when there are two reasonable views possible on the interpretation of fiscal provisions, it is well settled that one that favours the subject be adopted. It is, therefore, for our consideration whether, on the set of facts from which the issues before us ema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interpretation provides that when there is a conflict in a general provision and a special provision operating in the same field, the special provision must be given effect to and the general enactment can only apply in respect of provisions not covered by the special or particular provisions. In this context, we find that there is a general provision with regard to the speculation business (sic). The interpretation and the definition of "business" under section 2(13), in our opinion, cannot be availed of. 9. In view of what is stated above, it is clear that there is a conflict of judicial opinions on the interpretation of the words "speculative transactions" used in Explanation 2 to section 28 and in these situations the interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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