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Tax Publishers 2017 TaxPub(DT) 4514 (Mum-Trib)

 

Amol Capital Markets (P)Ltd. v. Dy. CIT

 

INCOME TAX ACT, 1961

--Loss--Speculation lossApplicability of Explanation to section 73----If the business of a company which does not fall within the excluded categories consists of purchase and sale of shares of other companies, then such a company shall be deemed to be carrying on speculation business for the purpose of section 73, to the extent to which the business consists of the purchases and sale of such shares.--Assessee company was a share broker exclusively dealing in Purchase/Sale of shares. It claimed STCL on sale of shares held as investment. AO held that the said loss from sale of shares was a deemed speculative loss, as the assessee was to be deemed to be carrying on a speculative business of purchase and sale of shares of other companies as per the provisions of Explanation to section 73. Hence, said loss claimed by assessee was liable to be assessed as a “Speculation loss” and could not be accepted as a STCL as per the Explanation to section 73. Held: The provisions of Explanation to section 73 were clearly attracted in the present case, in as much as the assessee was not covered by exclusions contemplated therein. Thus, in the backdrop of the aforesaid factual position, the assessee company shall be deemed to be carrying on a speculative business to the extent to which the assessee”s business consists of the purchase and sale of the shares of other companies. Further in order to apply the Explanation to section 73, it is not necessary that the assessee must have actual speculation loss, other than the loss deemed to be speculative within the meaning of Explanation to section 73.

Income Tax Act, 1961 Section 73, Explanation,

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2012-13



IN THE ITAT A BENCH, MUMBAI

G.S. PANNU, A.M. & RAVISH SOOD, J.M.

Amol Capital Markets (P) Ltd. v. Dy. CIT

ITA No. 1974/Mum/2016

A.Y. 2012-13

21 August, 2017

Assessee Allowed

Assessee by: Venugopal Nair

Revenue by: Durga Dutt, Departmental Representative

ORDER

Ravish Sood, J.M.

The present appeal filed by the assessee is directed against the order passed by the Commissioner (Appeals)-9, Mumbai, dated 28-12-2015, for assessment year 2012-13, which in itself arises from the order passed by the assessing officer under section 143(3) of the Income Tax Act 1961 (for short Act), dated 27-1-2015. The assessee assailing the order of the Commissioner (Appeals) had raised the following grounds of appeal before us :--

1. The Learned Commissioner (Appeals) erred in facts and circumstances and in law in confirming the action of assessing officer holding ST Capital Loss and Loss on F&O as speculative invoking explanation to section 73.

The Learned Commissioner (Appeals) erred in facts and circumstances and in law in confirming the action of assessing officer disallowing 50% of Expenses debited to P&L Account as attributable to speculative business.

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