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TMI Blog1982 (3) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ad 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 M/s. Bal Krishan Mohinder Pal, Begapurans and the said Sarson was sold to M/s Devi 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 found that the expenses relating to this transaction had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal had taken a view in ITA No. 984 of 1976-77 in the case of M/s. Arora Cotton Co. that a single transaction cannot constitute speculative business yet the issue to be examined afresh in view of the submissions that follow. It was contended by Shri Khichi, Jr. Authorised Representative, that the judgment of the Bombay High Court in the case of CIT vs. India Commrl. Co. (P) Ltd. (1977) 106 ITR 465 (Bom) 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 Andhra Pradesh High Court in the case of Addl. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77)110 ITR 170 (P H) 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 consideration. 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 different High Court have taken different view of the Explanation 2 to s. 28, the reasonable one is as propounded by the revenue and that should be accepted. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 shows that on the interpretation of provisions of Explanation 2 to s. 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 emanate, there is any justification for an interference in the order of the AAC of IT to grant the appeal of the Revenue. 8. After very careful consideration of the riva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actment can only apply in respect of provisions not covering the social or particular provisions. In this context then we find that there is a general provision with regard to the speculation business. The interpretation and the definition of business u/s 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 s. 28 and in this situation the interpretation in favour of the assessee must be accepted. We accept it and confirm the order of the AAC in this regard thereby dismissing the appeal of the revenue. 10. Now coming to the cross-objection of the assessee, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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