Anand Mining Corporation, Jabalpur V. Deputy Commissioner of Income tax(Central), Jabalpur

CO 2/JAB/2018

AI Insights

The case involves the Deputy Commissioner of Income Tax (Central), Jabalpur as the appellant and Anand Mining Corporation as the respondent. The core issue revolves around the rectification of an assessment order under section 154 of the Income Tax Act, 1961, where the Assessing Officer initially allowed the set-off of a loss from commodity derivative trading against the business income of the assessee. The Revenue contended that this was a mistake, as the losses were from speculative transactions. The Commissioner of Income Tax (Appeals) upheld the assessee's position, leading to the Revenue's appeal to the Tribunal. The Tribunal found that the rectification order did not meet the legal requirements and restored the matter to the Assessing Officer for a fresh examination.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 112970 (ITAT-JABALPUR)
• Duration Of Justice: 4 year(s) 5 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowedPartlyAllowedPartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 21-08-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 31-05-2018
• Other Referred Cases: CIT v. Woodward Governor India Pvt. Ltd. [2009] 312 ITR 254 (SC), Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1 (SC), CIT v. Canara Bank Ltd. [1967] 63 ITR 328 (SC), Anchor Pressings P. Ltd. v. CIT [1986] 161 ITR 159 (SC), L. Hirday Narain v. ITO [1970] 78 ITR 26 (SC), S. Sankappa & Ors. v. ITO [1968] 68 ITR 760 (SC), Maharana Mills (P.) Ltd. v. ITO [1959] 36 ITR 350 (SC), Mahendra Mills Ltd. v. AAC [1975] 99 ITR 135 (SC), CIT v. K.N.Oil Industries [1983] 142 ITR 13 (MP), T.S. Rajam v. CED [1968] 69 ITR 342 (Mad), Karamchand Premchand Pvt. Ltd. vs. CIT [1993] 200 ITR 268, 273 (SC), Northern Air Products Ltd. v. CIT [2005] 274 ITR 225 (MP), CIT v. Keshri Material (P.) Ltd. [1999] 237 ITR 165 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Rectification of order; Opportunity of being heard; Speculation loss; Capital Gains
• Section: 28; 143(3); 43(5); 274; 13

Judgement Text

1 | P a g e IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI SANJAY ARORA, HON‘BLE ACCOUNTANT MEMBER & SHRI MANOMOHAN DAS, HON'BLE JUDICIAL MEMBER I.T.A. No. 103/JAB/2018 (Asst. Year: 2014-15) C.O.No. 02/JAB/2018 (arising out of I.T.A. No. 103/JAB/2018) (Asst. Year: 2014-15) Appellant by : Shri Shravan Kumar Gotru & Sh. Sanjay Kumar, CIT-DRs Respondent by : Shri Dhiraj Ghai, FCA Date of hearing : 22/08/2022 Date of pronouncement : 21/11/2022 O R D E R Per Sanjay Arora, AM [ This is an Appeal by the Revenue directed against the Order by the Commissioner of Income Tax (Appeals)-1, Jabalpur ( ̳CIT(A)‘ for short) dated 12/02/2018, allowing the assessee‘s appeal contesting the rectification (vide order Dy. CIT (Central), Jabalpur. vs. Anand Mining Corporation, 1, Khitola Bazar, Jabalpur - 483225 [PAN : AAGFA 0187 Q] (Appellant) (Respondent) Anand Mining Corporation, 1, Khitola Bazar, Jabalpur - 483225 [PAN : AAGFA 0187 Q] vs. Dy. CIT (Central), Jabalpur. (Appellant) (Respondent) ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 2 u/s. 154 dated 14/6/2017) of it‘s assessment under section 143(3) of the Income Tax Act, 1961 ( ̳the Act‘, hereinafter) dated 05/12/2016 for the Assessment Year (AY) 2014-15. The assessee‘s cross objection (CO) assails the impugned order for, apart from on merits, having decided the issue on merits and without considering the aspect of admissibility of the rectification in the facts and circumstances of the case. 2.1 The brief facts of the case are that assessee, a partnership firm in mining business, returned it‘s income for the relevant year on 29/11/2014 at Rs. 552.85 lacs, comprising wholly of business income. Assessment was made u/s. 143(3) on 05/12/2016 at Rs. 838.29 lacs, again, as business income (assessment order on record/DPB pgs. 29-37). The same was subsequently enhanced to Rs. 2225.42 lacs by making an addition for Rs. 1387.13 lacs by, as stated, disallowing expenditure claimed on loss on shares in three Kolkata based companies (specified by name) vide order u/s. 154 dated 14/6/2017. Notice u/s. 133(6), as stated in the sec.154 order, seeking information on the listing status of these three companies on Calcutta Stock Exchange (CSE), had been sent on 16/11/2016, though no reply had been received up to the date of assessment. Subsequent reply thereto confirmed that none of these three companies was listed on CSE (DPB pgs. 1,2). The loss on shares claimed, which is from three (3) unlisted companies, is in the nature of a speculation loss, inadmissible for setoff against business income. In rectification proceedings, the assessee, vide it‘s reply dated nil (filed on 09/01/2017) (APB-1, pgs. 551-58/APB-2, pgs.1-8), given in Dak (receipt counter), referred to it‘s reply dated 29/8/2016 furnished during the assessment proceedings (enclosing copy thereof), wherein it had explained about the impugned loss in detail, producing supporting documents, being copies of bills/ contract notes, and detailing the transactions date-wise. The same had found acceptance after due verification. Review thereof was not permissible, toward which it cited several case-laws (para ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 3 2). Submissions were also made on both the transactions comprising the impugned loss which, succinctly stated, are as under:- (a) Foreign currency trading loss (Rs. 5,99,53,188): the assessee exporting iron ore, had hedged itself against the risk of adverse movement (i.e., appreciation of the Indian Rupee against the foreign currency), and which had led to the said loss, admissible as revenue loss, placing reliance on, inter alia, CIT v. Woodward Governor India Pvt. Ltd. [2009] 312 ITR 254 (SC); Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1 (SC); CIT v. Canara Bank Ltd. [1967] 63 ITR 328 (SC). The transactions were routed through the broker (M/s. Geometry Vinijya Pvt. Ltd.), a listed broker with MCX Stock Exchange Limited, a recognized stock exchange; (b) Commodity derivative trading (Rs. 7,87,59,794): the assessee had carried commodity derivative trading through M/s. Rajgharana Commodity Trading Pvt. Ltd. and M/s. Kathrene Agency Pvt. Ltd., being members of National Multi Commodity Exchange of India Ltd. and Universal Commodity Exchange of India Ltd. respectively. A transaction of commodity derivative trading carried out in a recognised association is not a speculative transaction u/s. 43(5)(e), which provision stands inserted on the statute-book by Finance Act, 2013, w.e.f. 01/04/2014, i.e., AY 2014-15 onwards. The same is, thus, liable to be adjusted against income from mining business. Thirdly, it was submitted that both the reasons for which the rectification is sought to be made, as under, are (for the reasons stated therein) not valid: (para 3) a) the three Kolkata based companies, in shares in which loss on trading was stated as claimed, being not listed on CSE; and b) the loss claimed being speculative. This was followed by a reply dated 31/01/2017 (submitted on 01/02/2017) (APB- 2, pg.28), whereby registration certificates of the broker companies were stated as furnished. The AO, however, disallowed the claim of loss, regarding it as suffered on trading in unlisted shares on CSE, as a speculative loss. 2.2 In appeal against the said order, it was explained before the first appellate authority that the matter had received due consideration by the Assessing Officer (AO) in the assessment proceedings. The assessee reiterated it‘s submissions, which found acceptance by the ld. CIT(A), who held as under: (pgs. 23-25) ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 4 ―(vi) In the case of the assessee, it has entered into foreign currency trading because it is an exporter of iron ore. Hence in view of ratio laid down by the Hon'ble Supreme Court the AO was not justified in holding in rectification order that for foreign currency exchange trading loss of Rs.5,99,53,188/- is a speculation loss. Whereas it is business loss and its setoff is allowable against the business income. (vii) For the above reason and also for the reason that this issue is a debatable issue, I am of the considered opinion that the AO erred in holding that foreign currency trading loss of Rs. 5,99,53,188/- is a speculation loss. The AO is directed to treat foreign currency trading loss of Rs. 5,99,53,188/- as business loss and allow its setoff against the business income of the assessee as has been done in the original assessment order passed on 05/12/2016. (viii) The assessee has incurred commodity trading loss of Rs. 7,87,59,794/-. The assessee has carried on commodity derivative trading through Rajgharana Commodity Trading Pvt. Ltd. (member of National Multi Commodity Exchange India Ltd.) and Katheran Agencies Pvt. Ltd. (member of Universal Commodity Exchange of India Ltd.) and the assessee has enclosed contract note of registered broker of commodity exchange in which date, order number, trade number, trade time, quantity, price, brokerage, amount of transaction, Unique identification number was given. These contracts are enclosed on page 365 to 551 of the paper-book filed by the assessee. (ix) The section 43(5)(e) has been amended by Finance Act 2013. In this section proviso has been inserted to provide that transaction in respect of commodity derivative carried out in recognized association will be treated as business loss. This amendment is applicable from the assessment year 2014-15. The assessee has incurred loss of Rs. 7,87,59,794/- on commodity derivative hence in view of the provision of section 43(5)(e), this loss is a business loss and not speculation loss as held by the AO in the rectification order. For this reason this loss of Rs. 7,87,59,794/- has to be set off against the business income of the assessee as has been done in the assessment order passed on 05/12/2016. He finally concluded as under: (x) There is no mistake apparent from record in the assessment order passed on 05/12/2016. Accordingly, the AO is directed to treat the foreign currency trading loss and commodity derivative loss of Rs. 13,87,12,982/- as normal business loss and to allow the setoff of this loss against the business income of the assessee as has been done in the assessment order passed on 05/12/2016. In the result, these grounds of appeal are allowed. (emphasis, ours) Aggrieved, both the Revenue and the assessee are in appeal; the latter per it‘s CO, raising the following Grounds: ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 5 Revenue: ̳On the facts and in the circumstances of the case, the CIT(A) erred in deleting the addition of Rs. 13,87,12,982/- made by the AO on account of set off of speculation loss against business income.‘ Assessee: 1. On the facts and in the circumstances of the case, the ld. CIT(A) should have held that the initiation of proceeding under section 154 is bad in law. 2. On the facts and in the circumstances of the case, the ld. CIT(A) should have held that the rectification order dated 13/6/2017 (*) is bad in law. [(*) correct date is ̳14/6/2017‘] 3. We have heard the parties, and perused the material on record. 3.1 Section 154, in its relevant part, reads as under: Rectification of mistake. ̳154. (1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,— (a) amend any order passed by it under the provisions of this Act; (b) amend any intimation or deemed intimation under sub-section (1) of section 143; (c) amend any intimation under sub-section (1) of section 200A. (1A) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided. (2) Subject to the other provisions of this section, the authority concerned— (a) may make an amendment under sub-section (1) of its own motion, and (b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee or by the deductor, and where the authority concerned is the Commissioner (Appeals), by the Assessing Officer also. (3) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee or the deductor, shall not be made under this section unless the authority concerned has given notice to the assessee or the deductor of its intention so to do and has allowed the assessee or the deductor a reasonable opportunity of being heard.‘ The matter shall have to be examined from the stand-point of jurisdiction, i.e., the admissibility of the rectification and, where admissible, on the merits thereof. This ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 6 is precisely what the assessee‘s CO, which is largely supportive, adverts to. Without doubt, it is only where the rectification — the scope of which is wider than Order XLVII, rule I of CPC, 1908 (Asok Textiles Ltd. (infra); Anchor Pressings P. Ltd. v. CIT [1986] 161 ITR 159 (SC)) is warranted that an addition or adjustment to the assessed income would follow (CWT v. Kamala Ganapathi Subramanium [1981] 127 ITR 175, 182-183 (Mad)). The two aspects, i.e., the jurisdiction for rectification and the exercise of jurisdiction, may though be intertwined, as where an adjustment would follow only where not doing so is itself a ̳mistake‘. This, as we shall presently see, is precisely, as it transpires, the case in the instant case. In L. Hirday Narain v. ITO [1970] 78 ITR 26 (SC), the Hon‘ble Apex Court held that the assessing authority invested with a power was bound to exercise it if the conditions for the exercise of power were shown to exist. Further, that; the decision having been rendered in the context of the 1922 Act, merely because a revision application under section 33A could have been moved, but was not moved, would not justify the dismissal of the petition except of course on merits after being heard. The proceeding taken for rectification of assessment u/s. 35 of the 1992 Act (corresponding to s.154 of the Act) is, as explained in S. Sankappa & Ors. v. ITO [1968] 68 ITR 760 (SC), a proceeding for assessment. That ̳record‘, for the purposes of sec. 154, would mean the record of assessment, i.e., all the material available in the proceedings of assessment, represents trite law (Maharana Mills (P.) Ltd. v. ITO [1959] 36 ITR 350 (SC); Mahendra Mills Ltd. v. AAC [1975] 99 ITR 135 (SC); CIT v. K.N.Oil Industries [1983] 142 ITR 13 (MP)). Section 43(5), again, in its relevant part, reads as under: Definitions of certain terms relevant to income from profits and gains of business or profession. 43. In sections 28 to 41 and in this section, unless the context otherwise requires – (1) to (4) ..... (5) ―speculative transaction‖ means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips: ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 7 Provided that for the purposes of this clause— (a) to (d) xxxxxxxxx (e) an eligible transaction in respect of trading in commodity derivatives carried out in a recognised association, which is chargeable to commodities transaction tax under Chapter VII of the Finance Act, 2013 (17 of 2013), shall not be deemed to be a speculative transaction: (emphasis, supplied) The terms ̳eligible transaction‘, ̳commodity derivative‘, and ̳recognised association‘ are defined in Explanation 2 to the provision. Explanation 2.—For the purposes of clause (e), the expressions— (i) "commodity derivative" shall have the meaning as assigned to it in Chapter VII of the Finance Act, 2013; (ii) "eligible transaction" means any transaction,— (A) carried out electronically on screen-based systems through member or an intermediary, registered under the bye-laws, rules and regulations of the recognised exchange for trading in commodity derivative in accordance with the provisions of the Forward Contracts (Regulation) Act, 1952 (74 of 1952) and the rules, regulations or bye-laws made or directions issued under that Act on a recognised stock exchange; and (B) which is supported by a time stamped contract note issued by such member or intermediary to every client indicating in the contract note, the unique client identity number allotted under the Act, rules, regulations or bye-laws referred to in sub-clause (A), unique trade number and permanent account number allotted under this Act; (iii) "recognised association‖ means a recognised association as referred to in clause (j) of section 2 of the Forward Contracts (Regulation) Act, 1952 (74 of 1952) and which fulfils such conditions as may be prescribed and is notified by the Central Government for this purpose; Clearly, any commodity, a term not defined under the Act, so that it would have to be assigned or understood in its common parlance meaning, purchased or sold, contract for which is settled other than by way of actual delivery or transfer, is, by definition, speculative. Exceptions are provided vide proviso thereto (clauses (a) to (e)), so that where falling thereunder the transaction would not be deemed speculative. 3.2 We may begin by reproducing the relevant part of the assessee‘s reply dated 29/8/2016, furnished during the assessment proceedings (APB-2, pgs.11-26/ DPB 13-28). It is these submissions, being the only submissions at assessment stage, as ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 8 is the clear, admitted position, as well as the materials furnished along with, being, as we shall presently see, the date-wise detail of loss and the ledger accounts of brokers, as also the letter dated 16/11/2016 to CSE, which would constitute the ̳record‘ inasmuch as it is only with reference to this that the AO regards the order of assessment as ̳mistaken‘. The said reply, in its relevant part, reads as under: ̳6.3 (3) The assessee firm suffered a trading loss of Rs. 13,87,12,982/- during the year under consideration and the same is debited in the profit and loss account of the assessee firm. Out of the total loss, the loss suffered under the foreign exchange currency trading of Rs. 5,99,53,188/- and under the commodity trading of Rs. 7,87,59,794/-. Thus the total loss suffered by the assessee firm amounting to Rs. 13,87,12,982/-. The assessee firm made a trading of foreign exchange currency through the company of registered broker GEOMETRY VANIJYA PRIVATE LIMITED, having its registered Office at 11, Clive Row, Kolkata – 700 001. The complanince Off. Gautam Mukherjee and Email id is [e-mail]. The Permanent Account Number (PAN) of the company is AACCG6000B. All transaction done through exchange and duly supported by the contract note and bill. The photocopies of the contract note/bill, where in, the details of contract note no., trade date, order no., order time, trade no., trade time, contract description, quantity, buy/sell, gross rate per contract, Value (Rs.) and Total (Inclusive/net of brokerage + Service Tax + TOC – Net amount of transaction are mentioned, the same are enclosed here with for your kind consideration. We have also prepared the date wise details of transactions the same are enclosed here with for your kind reference. The photocopy of the loss account and the copy of ledger account as appearing in the books of account of the assessee firm are also enclosed here with for your kind consideration. The transactions are genuine and duly supported by the vouchers, the same may please be accepted. If any verification is required the same may please be done and allowed the claim of the assessee. In the same manner the assessee firm suffered a commodity trading of Rs.7,87,59,794/- during the year under consideration. The assessee made a commodity trading through two brokers namely KATHRENE AGENCY PVT. LTD. CO. and RAJGHARANA TRADING COMMODITIES PVT. LTD CO. The assessee firm made a trading of commodity through the one company of registered broker Kathrene Agency ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 9 Pvt. Ltd., having its registered office at 22, Goenka Lane, 2 nd Floor, Kolkata – 700 007. The Permanent Account Number (PAN) of the company is AAECK4287A. In the same manner, another company is Rajgharana Trading Commodities Pvt. Ltd. Company having its registered office at ...left blank..... The Permanent Account Number (PAN) of the company is ...left blank........ All transactions are done through exchanges and duly supported by the contract notes and bills. The photocopies of the contract note/bill, where in, the details of contract no., date, order no., trade no., trade time/Time, quantity, Price, Brokerage, Amount, i.e., goods bought for you. The same details are mentioned under the head of goods sold for you, where in details mentioned, contract specifications, Quantity, Price, Brokerage and Amount of transaction are mentioned, the same are enclosed herewith for your kind consideration. We have also prepared the date wise details of transactions the same are enclosed here with for your kind reference. The photocopies of the loss account and the copy of ledger accounts as appearing in the books of account of the assessee firm are also enclosed here with for your kind consideration. The copy of ledger account of broker Kathrene Agency Pvt. Ltd. and Rajgharana Trading Commodities Pvt. Ltd. in their books account and the copies of ledger account in the books of (sentence not complete)‘ (emphasis, ours) 3.3 There is, clearly, no whisper therein of the expenditure/loss under reference being on trading in shares. All the assessee‘s reply states is of the relevant transactions being duly supported, through an Exchange and per registered brokers; in short, genuine. There is also no reference to the transactions, stated to be in (a) foreign currency trading, and (b) trading in commodities, being non- speculative u/s. s.43(5) or, for that matter, being carried out through a recognised association or even a recognized stock exchange, even as the ingredients of the contract note specified for both the category of transactions are with reference to that specified in sub-clause (B) of Explanation 2 to s. 43(5), which defines an ̳eligible transaction‘ u/s. 43(5)(e) per cl. (ii) thereof. We say ̳stated‘, as there is nothing on record to exhibit that the bills/contract notes evidencing the transactions were furnished in assessment, and which is only understandable as the query by the AO was a general enquiry, i.e., qua large expenses (APB-2, pgs. 9- ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 10 10/DPB pgs. 3-4). A voluminous (containing 558 pages) paper-book filed by the assessee (APB-1), clearly states, as required under the Income Tax (Appellate Tribunal) Rules, 1963, in the index thereto, of the same being furnished before the ld. CIT(A) (qua pages 1-549). The AO, as it appears, and as was the common ground before us, made no further inquiry, or even a query with the assessee in respect of the said expenditure/loss in assessment proceedings. No wonder, then, the assessment order dated 05/12/2016 bears no reference whatsoever to any such, or to any response by the assessee thereto. Subsequently, notice u/s. 154 was issued on 14/12/2016, which in its relevant part reads as under: Particular of mistake proposed to be rectified You have claimed the expenditure amounting to Rs. 13,87,12,982/- on Loss on share namely from the Kolkata Based companies M/s. Katheran Agency Pvt. Ltd., M/s. Geometry Vanijya Pvt. Ltd. and M/s. Rajgharana Commodities Trading Pvt. Ltd. which are not listed in CSE. Besides this, the loss of Rs. 13,87,12,982/- is in the nature of speculation Loss and it should not be set off against the business income of the Firm. You are hereby directed to produce the details of the said expenditure of Rs. 13,87,12,982/- and why should not this expenditure disallowed and added to your total income. (APB-1, pg. 550/APB-3, pg. 57) (emphasis, by underlining, ours) There is no reference to any material with reference to which the transactions are stated (or inferred) to be of trading in shares. On what basis, then, does the AO state of the loss claimed being on the loss on shares? This becomes clear from the CA certificate dated 02/01/2017 (APB-1, pg. 364A), adduced before the ld. CIT(A), stating that the said expenditure had been wrongly described in the ̳profit and loss account‘ as ̳shares loss‘, and be read, instead, as ̳commodity and foreign currency loss‘. This certificate, however, was not furnished to the AO, before whom the assessee did not appear in rectification proceedings, preferring to file it‘s replies in Dak, nor clarified the said mistake in it‘s replies to her at any stage. And which, thus, explains the AO‘s stance. ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 11 3.4 We are, in view of the assessee‘s reply dated 29/8/2016, the assessment order dated 05/12/2016, followed by notice u/s. 154 dated 14/12/2016, in principle, in agreement with the assessee‘s reply filed on 09/01/2017, furnished during the rectification proceedings. That is, firstly, review is excluded in rectification proceedings and, two, the two reasons that prevailed with the AO in moving rectification proceedings for denial of set off of the impugned loss, are as under: i) that the shares on the trading in which the loss claimed stands incurred, are not listed on CSE, a recognized stock exchange. ii) the impugned transactions are speculative, and the loss thereon, thus, speculative in nature. The words ̳Besides this‘, at the beginning of the second sentence of the reasons, which, in the view of the AO, for the mistake inflicting the assessment dated 05/12/2016, signify the same as the second, without prejudice, reason. It may be noted that the AO, while referring to this reason, speaks of loss rs. 1387.13 lacs, even as the assessee does per it‘s reply dated 29/8/2016 before her in assessment. Why, even the assessee has also considered the same as so, and which also explains the assessee‘s reply filed on 09/01/2017 addressing both the reasons separately per paras 3.1 & 3.2 respectively. To this extent there is thus no difference between the assessee and the AO. Sure, it would have been in order and more appropriate for the AO to have added the words ̳within the meaning of s. 43(5) of the Income Tax Act, 1961‘ after the words ̳speculative loss‘ in the said sentence. However, that by itself would be of no consequence inasmuch as the said word is to be necessarily understood in terms of the applicable law. We advert to s. 43(5) as it is the only provision in the Act that defines a speculative transaction (at least for a non-company), and with reference to which therefore the nature, speculative or otherwise, of a transaction is to be under the Act determined. The assessee, who did not in assessment advert to the speculative or otherwise nature of the relevant trading transactions, or to s. 43(5) for that matter, in rectification proceedings, justified it‘s claim of loss (i.e., qua commodity derivative trading) as ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 12 non-speculative in terms of clause (e) of s. 43(5), introduced on the statute with effect from the relevant assessment year. Qua foreign currency trading, the same was sought to be explained as being hedging to safeguard itself against the loss due to rate fluctuation of the Indian rupee (INR) against foreign exchange (in which the iron ore was exported), i.e., as being in respect of the assessee‘s mining business. It is, on facts, therefore, incorrect to say, as the assessee does per it‘s said reply, that the matter, explained in assessment, was treated by the AO as a business loss; there being in fact no material before her to suggest the same being not, as claimed, loss on shares. As apparent from the material on record, the claim before the AO in assessment was only as to the transactions giving rise to the impugned loss as being on genuine, independent transactions, liable for setoff against income from mining business. Toward genuineness, as it seems to us, she therefore made an enquiry with the CSE. As shall also be seen (refer para 3.2), there is no reference therein to the transactions being through a recognised stock exchange, so that the same, being in shares in Kolkata based companies, was inferred by her to be traded on CSE. Further, the loss, being stated to be on trading in foreign currency and commodities, the same, in the absence of any claim of the transactions being excepted u/s. 43(5)(e), much less shown to be so, was regarded by her as per se speculative, i.e., on the basis of the material on record, being the assessee‘s reply dated 29/8/2016 and, inferably, the material produced before her. 3.5 This then form the backgrounds facts leading to the issue of notice u/s. 154 on 14/12/2016, listing the particulars of the mistake (reproduced hereinbefore at para 3.3), requiring the assessee to show as to why, under the given facts and circumstances (and the law in the matter), the loss on trading in shares be not set off against business income of the assessee-firm. We shall take both the reasons stated therein in seriatim for examining their validity. (A) There can surely be no trading in a share unless it is listed, so that the inference of the claim being not genuine in view of it being not listed, cannot be ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 13 per se faulted with. This itself is sufficient to impugn the genuineness of the impugned loss, i.e., where in respect of share loss, with the assessee having not furnished the relevant bills/contract notes, perhaps on account of the same being voluminous, in the assessment proceedings, so that the same were not on record at the time of issue of notice u/s. 154. No inquiry with CSE, reply from which having been admittedly received after the assessment, cannot also form part of the record, was required inasmuch as transferability of shares in a private limited company is severely restricted, and cannot, by definition, be listed for trading. So, however, this reason cannot be upheld. There is, firstly, nothing on record to suggest that the share loss, even assuming so, is in the said three private limited companies, explained as broker companies by the assessee per it‘s reply dated 29/8/2016, and could well have been in some other listed – on CSE or some other SE, companies. Two, once the assessee clarifies in assessment as to the trading loss of rs. 1387.13 lacs being on trading in foreign currency and commodity trading, even though without admitting the mistake in it‘s audited accounts, it was incumbent on the AO to question the assessee, who claims to have produced the relevant bills before her, in the matter, and be satisfied in its respect, rather than acting de hors the same. The first reason for rectification, accordingly, fails. (B) As regards the second reason, i.e., of the transactions being speculative and the loss arising therefrom, thus, speculative, inasmuch as the same is regarded non- speculative despite the same being admittedly on transactions in foreign currency and commodity derivative trading, through a commodity exchange, without reference to the exclusion clauses of section 43(5), the same is clearly a mistake. This is for the simple reason that a mistake of law is as much a mistake u/s. 154 as is a mistake of fact. As such, a failure to take note of a statutory provision/s, as indeed a failure to take note of the statutory requirement, would supply a ground for rectification (ITO v. Asok Textiles Ltd. [1961] 41 ITR 732 (SC); Karamchand Premchand Pvt. Ltd. vs. CIT [1993] 200 ITR 268, 273 (SC); Northern Air Products Ltd. v. CIT [2005] 274 ITR 225 (MP)), to cite some. The said reason is, ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 14 thus, valid in law. This, then, validates the notice u/s. 154 dated 14/12/2016, and there is thus a valid assumption of jurisdiction for rectification. 3.6 We may next discuss the merits of the adjustment to the assessed income, which is the subject matter of both, the Revenue‘s appeal, and the assessee‘s CO (Gd. 2), i.e., as argued before us. We may in this respect clarify that the AO having not questioned the assessee further in assessment, i.e., subsequent to it‘s submissions dated 29/8/2016, only the facts brought forth by the assessee or borne out by the material on record, are to be adopted. Applying the law thereto, if therefore the transactions resulting in the impugned loss are speculative, i.e., with reference to sec. 43(5), the parameters of which are well-defined, an adjustment would arise, else not. This, it shall be noted, is in respect of the merits of the adjustment in rectification. Due opportunity of hearing is to be by law provided where the same would have the effect of enhancing an assessment, being even otherwise a postulate of fair hearing, itself an article of natural justice. The objection by the assessee could though be toward both, i.e., the rectification in principle, as well as the proposed adjustment. We may, to begin with, set-out the relevant provisions of the Act, i.e., other than sec. 43(5) reproduced hereinbefore, as under, as, surely, it is only where a mistake obtains, after considering the assessee‘s explanation/s, per its replies filed on 09/01/2017 and 01/02/2017, i.e., with reference to the material on record and the clear law in the matter, that the same could be rectified: Set off of loss from one source against income from another source under the same head of income. 70.(1) Save as otherwise provided in this Act, where the net result for any assessment year in respect of any source falling under any head of income, other than "Capital gains", is a loss, the assessee shall be entitled to have the amount of such loss set off against his income from any other source under the same head. (2) onwards..... Set off of loss from one head against income from another. 71. (1) Where in respect of any assessment year the net result of the computation under any head of income, other than ―Capital gains‖, is a loss and the assessee has no income ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 15 under the head ―Capital gains‖, he shall, subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head. (2) onwards..... Losses in speculation business. 73. (1) Any loss, computed in respect of a speculation business carried on by the assessee, shall not be set off except against profits and gains, if any, of another speculation business. (2) to (4) ......... Profits and gains of business or profession. 28. The following income shall be chargeable to income-tax under the head ―Profits and gains of business or profession‖,— Explanation 2.—Where speculative transactions carried on by an assessee are of such a nature as to constitute a business, the business (hereinafter referred to as ―speculation business‖) shall be deemed to be distinct and separate from any other business. The law in the matter is well-settled and sans any ambiguity. In terms thereof, any transaction of purchase or sale of a commodity settled without delivery or transfer, is a speculative transaction (s. 43(5)). Exclusion to this general rule is provided per clauses (a) to (e) of proviso thereto, with cl. (e) being in relation to ̳commodity derivative trading‘. Loss of a speculative business can be set off only against income from another speculative business (s. 73(1)). This is an exception to the general rule (s. 70(1)) that loss from one source of income falling under a particular head of income is liable to be set off against income from another source under the same head of income. Further, where carried on in a manner so as to constitute a business, the loss of such speculative business, would be deemed to be separate and distinct from any other business (Explanation 2 to s. 28). The aspect of business, though apparent, is again not in dispute; the assessee though claiming it to be a non-speculative business in view of the satisfaction of the conditions of s. 43(5)(e). Assessment in the instant case stands made oblivious of the law on speculative transactions, i.e., in disregard of the statutory mandate, so that a rectification is per se warranted. We are conscious that the assessee, in rectification proceedings, explained the foreign currency trading transactions not ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 16 as commodity derivative trading, but on actual purchase/sale of foreign currency/exchange to protect it‘s iron ore export receipts in foreign exchange from rate fluctuations therein vis-à-vis Indian rupee, i.e., as being in respect of it‘s mining business (refer para 2.1). The same, thus, has the effect of objecting to the rectification in principle inasmuch as, where indeed so, the said transaction would be outside the purview of s. 43(5), disregard of which provision; the transactions as explained in assessment being apparently speculative in terms thereof, is the mistake attending the assessment. The said claim, however, apart from being without reference to any material, is inconsistent with the claim/s in its respect in assessment proceedings, i.e., trading in foreign currency per se. The said claim, found false, stands withdrawn (refer para 3.7). The entire loss under reference is, thus, in respect of commodity derivative trading. We have already clarified that the transaction of commodity derivative, which is the admitted position, is per se speculative u/s. 43(5) inasmuch as the same is not settled through delivery or transfer of the commodity being traded (viz. agricultural produce, as is the case in the lone bill of M/s. Kathrene Agency P. Ltd., placed on record (APB-3, pg. 40), upon absence of any bills of this company being communicated to Sh. Ghai, the ld. counsel for the assessee, during hearing), unless of course excepted under the exclusion clause thereof. The three primary conditions of s. 43(5)(e), which is in respect of trade in commodity derivative, are: a). the transaction is an eligible transaction; b). is undertaken through a recognised association; and c). is chargeable to commodities transaction tax. There is no reference to the satisfaction of any of these conditions, much less all of them, as required by law, in the assessee‘s reply/s filed in assessment or even in rectification proceedings, with in fact the assessee in the latter, wherein reference to s. 43(5)(e) stands made, and rightly so, quotes an incomplete section and, further, does not furnish the bills/contract notes evidencing the transactions, and on the basis of which it claims them as excluded u/s. 43(5)(e). That is, there is nothing ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 17 on record to exhibit the satisfaction of the said conditions. How could then the AO’s action in regarding the same as speculative, and not setting off, in result, the impugned loss against non-speculative business income, be faulted with? The subsequent rectification, on the basis of the impugned loss being speculative, is however fraught. The source of loss is stated as on shares, instead of, as explained, and is admittedly the case, on commodity derivative trading. A clear mistake of fact. And, even as it states the loss to be speculative, it does so without reference to and de hors the defining provision (s. 43(5)), and without reference to, much less meeting, the assessee‘s claims in the rectification proceedings of the same being excluded under clause (e) of s. 43(5), which thus remains unaddressed. The rectification order thus does not meet the requirement of law as to a judicial order, and cannot have our approval, even as we, for the reasons afore-stated, agree with it in principle. 3.7 We may, before proceeding further, clarify the basis for our stating in the preceding para of the foreign currency trading as being only trading in commodity derivative, and it being stated in rectification proceedings as being in relation to the assessee‘s mining business is admittedly incorrect. The bills of Geometry Vanijya Pvt. Ltd. clearly reflect buying and selling transactions being effected. There is nothing therein toward a claim for actual purchase of currency as a trading stock, which is bought, only to be sold again, i.e., of the capital invested in the said stock. There is even no claim of margin money. That is, nothing to correlate the purchase and sale of foreign exchange/s with the assessee‘s exports. Even the foreign currency/s in and the countries to which the same are made, is not stated. The trades, which are several in a day, would be, where in relation to exports, far less in number and, further, correspond to the payment amounts and dates of the said export, while the same are restricted to 3 days, from 24/3/2014 to 26/3/2014. In fact, a hedging contract would stand to be concluded on the actual receipt of export payment, i.e., delivery of foreign currency. Hedging is even otherwise quizzical given that the Indian rupee (INR), in view of India‘s adverse balance of ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 18 payment position as well as high inflation in economy, is, on the contrary, at risk of depreciation vis-à-vis the US $, against which currency the hedge is, and which has historically appreciated against the rupee. Looked at from any angle, the same does not represent the stated hedging. In short, no relation with business is shown. In fact, the transactions were, as afore-noted, not claimed as in relation to the assessee’s business, and it is only in the rectification proceedings that a claim to this effect stands made, albeit without any material and, rather, contrary to that on record. This is relevant as unless shown to be on account of a bona fide mistake, the assessee is estopped from taking such a stand in rectification proceedings. Clarification in the matter was accordingly sought, whereat Shri Ghai confirmed foreign currency trading transactions to be part of commodity derivative trading. We further observe, also put across to him, that the assessee has per it‘s ̳statement of facts‘ (SOF) before the ld. CIT(A) admitted to the transactions in foreign currency trading to be commodity derivative trading; the same reading as under: ̳3. The assessee informed the ld. AO that the loss of Rs. 13,87,12,982/- was not on account of share of M/s. Katheran Agency Pvt. Ltd., M/s. Geometry Vanijya Pvt Ltd. and M/s. Rajgharana Commodities Trading Pvt. Ltd., but was on account of commodity/ foreign currency derivative trading, and the ld. AO passing the assessment order, after due inquiry has correctly assessed this loss of Rs. 13,87,12,982/- as business loss. That is, that it is a commodity derivative trading is an admitted position, with Sh. Ghai further clarifying foreign exchange to be a commodity, so that a trade in foreign currency is a trade in commodity derivative, deemed non-speculative u/s. 43(5)(e), i.e., as the commodity derivative trading per M/s. Rajgharana Trading Commodities Pvt. Ltd. and M/s. Kathrene Agency Pvt. Ltd., the other two brokers. That is to say, the misstatement in rectification proceedings in its respect, it was argued by him, would not, in view of the correct facts, undermine the assessee‘s case. Its effect on the assessee‘s case aside, the misstatement, being misleading, is in itself unfortunate. The fact that thus obtains is that the entire loss is in respect of commodity derivative trading. Even otherwise, as clarified hereinbefore, unless proved incorrect with reference to the material on record, or otherwise ineligible in ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 19 terms of clear law, the assessee‘s claims qua facts made in assessment would, in view of non-verification by the AO, be adopted as correct. 3.8 We have at this stage two options, either to issue appropriate findings, wherein that per the rectification order would merge, or to restore the matter back to the file of the AO for the purpose. Though this question, the rules being well laid out, does not normally arise, the present is a case of rectification proceedings, the scope of which is severely limited. As afore-said, the issue as to the nature of the impugned loss, speculative or otherwise, is to be determined on the basis of the material on record and, further, on the anvil of the clear law in the matter, and for which due opportunity stands already provided to the assessee. Sh. Ghai would during hearing, on being conveyed the clear non-satisfaction of the conditions of s. 43(5)(e), submit that a ̳recognised association‘ is pari materia with a ̳recognised stock-exchange‘, even as the two, we note, stand defined qua different clauses of s. 43(5) and, besides, with reference to different enactments and, further, are required to meet the conditions prescribed by the Central Government in their respect, which cannot be presumed to be the same. The same though is a matter that would stand to be clarified with reference to the relevant legislation; a delegated legislation being also a part of law. Like-wise, he would argue in respect of an ̳eligible transaction‘, which is also defined with reference to the same Act, with, as afore-noted, the ingredients thereof as specified in Cl. (B) to Explanation 2 to s. 43(5)(e) being referable to the bills/CNs. No answer, however, was forthcoming from him in relation to the applicability of commodities transaction tax. The assessee, as we observe, has made bald claims in rectification proceedings toward satisfaction of the conditions of s. 43(5)(e), which provision does not even find proper reflection in it‘s submissions. Each of the claims though are determinable with reference to the applicable law, which are apparently not met. We, under the circumstances, consider it proper to restore the matter back to the file of the AO for fresh determination, i.e., examine if the impugned ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 20 transactions are indeed excepted u/s. 43(5)(e), as claimed by the assessee, or not. The AO shall decide in accordance with law, issuing definite findings of fact, and after allowing the assessee a reasonable opportunity of being heard. We are conscious that we have hereinbefore stated that there is nothing on record to exhibit that the three basic conditions of section 43(5)(e) are met. True, but then that is precisely what validates the inference of a mistake, or else there is no mistake in the assessment as made, which therefore would stand to be confirmed, as by the ld. CIT(A), whose order therefore cannot be upheld. The prime reason for remittance is the absence of clear findings in the rectification order. There is nothing therein to show consideration of the assessee‘s explanations vide it‘s letter dated 09/01/2017. The assessee has also not helped matters. It did not furnish the bills/CNs, the principal documents it relies upon in appellate proceedings, even in the rectification proceedings, explaining the mistake in accounts; relied on an incomplete provision; preferring to even not appear before the AO. The restoration shall thus allow the assessee another opportunity to present it‘s case, addressing each of the conditions of s. 43(5)(e), and the AO to meet the stated deficiencies, and bring the assessment in conformity with law, the avowed object of the rectification proceedings. The assessee may, toward this, apart from the law, rely on the documents produced in assessment (viz. bills/CNs), being only toward substantiating it‘s claims in assessment. The restriction qua the material on record, it may be noted, is toward the inference of a mistake, and not toward if it indeed is, and which is what the right to show that no enhancement of it‘s assessment is indeed called for, in effect is, with there being nothing in law to curtail the said right. Of course, the assessee cannot turnaround, as it indeed sought to do in the instant case by claiming foreign currency trading to be in respect of it‘s mining business, and create fresh dispute/s (Kamala Ganapathi Subramanium (supra)). Not so holding would amount to a travesty of justice, with we having already clarified, on the basis of the material on record, that no exclusion u/s. 43(5)(e) obtains. The decision in CIT v. Keshri Material (P.) Ltd. [1999] 237 ITR 165 (SC), ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 21 relied upon by the assessee, holding in ratio of no reliance on outside material, defeats it‘s case at the threshold. 3.9 We are conscious that we have in deciding these cross appeals, not referred to the order by the ld. CIT(A), i.e., the order under appeal, so that our order is, as it may appear, de hors the same. This, however, and despite the said non-reference to his adjudication in some detail, is far from truth. The ̳mistake‘ that attends the assessment in the instant case, as found, is not, as stated before him and inferred by him, in treating the impugned loss as non-speculative or in allowing its set off, as claimed, against the assessee‘s mining business income, but, as explained hereinbefore, despite the assessee clearly stating before her of the same being commodity trading transactions, producing bills/contract notes toward the same, clearly exhibiting their settlement other than by actual delivery or transfer; there being no payment for purchase or receipt on sale, yet does not invoke s.43(5), i.e., the relevant provision under the Act, which requires the loss on such transactions to be treated separately, so that loss thereon, if any, is not set off against the assessee‘s other income in computing his total income in the year, i.e., despite the transactions being clearly such as would qualify to be speculative transaction, i.e., unless excepted under the excluding clauses of proviso to s.43(5), i.e., framing the assessment overlooking and de hors the said or other applicable provisions of law. This mistake stares one in the face as one goes through her order with reference to the material on record, viz. the assessee‘s reply dated 29/08/2016, reproduced hereinabove, and the documents enclosed along with or produced therewith. A mistake of law, which may include, but is not limited to, ignoring a provision of law or a statutory requirement, is a mistake rectifiable under 154. The ld. CIT(A), however, finds nothing wrong with the assessment which does not even whisper about the impugned transactions being speculative. That the transactions are in commodity derivative trading is admitted. All that therefore was required to be done was to see if s. 43(5)(e) is indeed applicable to the transactions under reference as borne out by the record, as in fact contended in rectification ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 22 proceedings. This is precisely what the ld. CIT(A) ought to have done, or caused to, in appellate proceedings. On the contrary, he even fails to notice the said omission in the assessment proceedings, as indeed in the rectification proceedings, even as he finds the former as in order, and the latter not so. And this, despite the entire bills/CNs having been furnished before him, the absence of which before the AO was also not noticed by him. He even does not adopt the correct provision of s.43(5)(e), where-under he confirms the transactions to be covered. Why, he even fails to observe that the assessee had, and which, coupled with the fact of it relying on incorrect law, inferably sleightly, in rectification proceedings, altered the nature of foreign currency trading transactions from being pure trading transactions to that of hedging transactions (in respect of its iron ore exports), i.e., without any supporting material or even explanation. Further, while he regards the issue of the deductibility of the said loss thereon as settled by the Apex Court, yet regards it as debatable! That is, his order is based on incorrect law and facts and contradictory. As it appears to us, he has, with respect, neither understood the facts of the case nor applied the law, correctly. What value, then, one may ask, his order? It is this that explains our non-reference to his order in our adjudication in appeals seeking to confirm or, as the case may be, declare as bad in law the rectification under reference, and is not indicative of our ignoring it. 3.10 Our adjudication, lest it may be construed otherwise, covers the assessee‘s CO as well. We are, as aforestated (para 3.1), in agreement in principle. This is as it is only where an order can, on the basis of the material on record, and given the applicable law, be said to be mistaken that rectification in its respect could follow. The issue raised does not survive in view of our delineation of the ̳mistake‘ as the disregard and clear omission to apply s. 43(5) in the facts and circumstances of the case (refer paras 3.5, 3.9). The ld. CIT(A) has held qua a part of the rectification as debatable, answering the assessee‘s CO (Gd. 1), and which has been found contradictory (para 3.9). As regards the disallowance on merits, we have, for the ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 23 reasons afore-stated, remitted the matter for fresh consideration in accordance with law to the file of the AO upon allowing due opportunity of hearing to the assessee. 4. In sum The assessee‘s claim of the set-off of the impugned loss against business income in assessment as correctly allowed by the AO upon verification, accepted by the ld. CIT(A), was, on examination, found to be de hors both the facts of the case and the law in the matter. There had been, after the initial inquiry, which was again a general inquiry in respect of ̳large expenses‘, no further verification or even finding by the AO in assessment, who had failed to take note of s. 43(5) of the Act, much less examine the satisfaction of the requirements thereof. This, despite the assessee‘s clear claim of the same being qua commodity trading undertaken through brokers registered with commodity exchanges, toward which it, besides producing the copies of the Bills/CNs issued by them, also furnished details and copies of their ledger accounts. The AO, as is the admitted position, even otherwise apparent from the record, did not make any further enquiry with the assessee in the matter, and completed the assessment allowing the set off of the said loss against the assessee‘s mining business income wherein the said loss was debited as ̳share loss‘. The assessee claims, that it‘s claims, on facts, to the extent made in assessment, were to be therefore accepted as such; no misstatement or falsity having been shown therein. We could not agree more, with estoppel operating against the assessee as well. There was, however, no whisper by the assessee – who had in fact claimed the same as an expense/s, during assessment about the satisfaction of any of the exclusion clauses of s. 43(5), defining the speculative transaction under the Act, or even a claim of the impugned loss being non-speculative and, thus, eligible for setoff against business income (u/s. 70). There is, accordingly, no finding by the AO in the matter, ostensibly accepting the assessee‘s claim. Section 43(5) being clearly attracted on the basis of facts borne out by the record, i.e., commodity derivative trading, which is, by definition, speculative, unless, of course, it is qua eligible transactions, defined thereunder ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 24 and, further, carried through the members of a recognised association, on which commodity transaction tax has been charged. There is in fact no claim of satisfaction of these attributes, or even reference to s. 43(5). The set off of the impugned loss against the assessee‘s other income without reference to s. 43(5) is clearly a mistake apparent from record which includes a mistake of law as well. The AO thus had the necessary jurisdiction for rectification in respect of the adjustment of the said loss, and the notice dated 14/12/2016 u/s 154, discussed in detailed at para 3.5 of this order, is, thus, a valid notice in the eyes of law. The AO, however, rather than ascertaining in the rectification proceedings if the impugned transactions did indeed satisfy the requirement/s of s.43(5) r/w clause (e) of proviso thereto, i.e., defining speculative transaction, issued a finding without any verification and indeed de hors the material on record, stating the impugned loss as on unlisted shares and speculative. Her order therefore, cannot, be approved, and the mistake that imbued the assessment order accordingly continues to obtain. The same ought to have been corrected by the ld. CIT(A), enjoying coterminous powers, in appeal. However, as again found and explained in detail hereinbefore, his order is again de hors the facts of the case and law in the matter and, therefore, cannot have judicial approval. That is, both the rectification order, as well as the appellate order holding original assessment as not mistaken, i.e., without impugning the notice for rectification, found valid, its merit apart, cannot have our approval and, thus, be upheld. Both the orders are accordingly set aside, and the matter restored to the file of the AO for causing an adjudication in accordance with law. Lest it may be argued that the matter cannot be in rectification proceedings remitted back with clear directions, reference may be made to the decision in T.S. Rajam v. CED [1968] 69 ITR 342 (Mad), which is in respect of estate duty, with cognate provision. The whole premise of rectification proceedings, it needs to be appreciated, and as even explained therein, is toward causing justice, for which reference may also be profitably made to L.Hirday Narain (supra). The facts of ITA No. 103/JAB/2018 & C.O. No. 02/JAB/2018 Dy. CIT vs. Anand Mining Corporation (AY: 2014-15) 25 this case, as indeed some others, are striking and illustrative, to which reference may therefore be made, though are not being recounted here so as not to burden this order further (viz. Karamchand Premchand (P.) Ltd. v. CIT [1993] 200 ITR 268 (SC); T.S. Rajam (supra)). We decide accordingly. 5. In the result, the Revenue‘s appeal is allowed for statistical purpose and the assessee‘s CO is partly allowed for statistical purposes. Order pronounced in open Court on November 21, 2022 Sd/- Sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 21/11/2022 vr/- Copy to: 1. The Appellant: Deputy CIT (Central), Jabalpur 2. The Respondent: M/s. Anand Mining Corporation, 1, Khitola Bazar, Jabalpur - 483225 3. The Principal CI T-1, Jabalpur 4. The CI T( Appeals)-1, Jabalpur 5. The CI T-D.R., I TAT, Jablapur 6. Guard File By order (VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Jabalpur.