SURESHCHAND S. JAIN, MUMBAI V. ACIT 4(2), MUMBAI

ITA 216/MUM/2011

• Counselvise Citation: 21619914 RSA 2011
• Duration Of Justice: 4 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 04-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 10-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN DR
• Assessee Lawyers: RAKESH JOSHI
• Keywords: Business income; Transactions in derivatives; Proportionate interest; Speculation loss
• Section: 6; 12; 10; 2; 11; 43(5)

Judgement Text

, , , , E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . , ! '# ! '# ! '# ! '#, ,, , $ $ $ $ BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI AMIT SHUK LA, JM . / ITA NO.216/MUM/2011 ( & ' (' / ASSESSMENT YEAR : 200708, ) SHRI SURESHCHAND S. JAIN 57/59, SHEIKH MEMON STREET, ZAVERI BAZAR, MUMBAI-400002 .. )* / APPELLANT & V/S ACIT 4(2) AAYAKAR BHAVAN, MUMBAI -400020 .... +,)* / RESPONDENT ) . / PERMANENT ACCOUNT NUMBER AACPJ6630M & '.! / 0 / ASSESSEE BY : SHRI RAKESH JOSHI (AR) 1 / 0 / REVENUE BY : SHRI ASGHAR ZAIN (DR) & / ! / DATE OF HEARING 04.03.2015 ' 23( / ! / DATE OF ORDER 04.03.2015 ' ' ' ' / ORDER ! '# ! '# ! '# ! '#, ,, , 4 4 4 4 / PER AMIT SHUKLA, J.M. THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 8 TH NOVEMBER 2010, PASSED BY THE LEARNED COMMISSIONER (APPEALS)8, MUMBAI, FOR THE QUANTUM OF ASSESSMENT PA SSED U/S. SHRI SURESHCHAND S. JAIN 2 143(3), FOR THE ASSESSMENT YEAR 2007-08 ON FOLLOWIN G GROUNDS OF APPEAL: 1.THE LEARNED ASSESSING OFFICER AS WELL AS LEARNED CIT (A) HAS ERRED IN DISALLOWING INTEREST EXPENSES U/S 36(1)(III) OF THE INCOME TAX ACT 1961 OF RS. 4,28,981/- ON THE ALLEGED PLEA THAT THE BORROWE D FUNDS HAS BEEN USED TO GIVE INTEREST FREE LOAN TO RELATIVES OF THE APPE LLANT WITHOUT INDEXATION BENEFIT WITHOUT CONSIDERING THE PROVISIONS OF LAW. 2. THE LEARNED ASSESSING OFFICER AS WELL AS LEARNED CT (A) HAS ERRED IN TREATING THE LOSS IN SHARE TRADING BUSINESS OF RS. 48,56,677/- INCURRED IN INTRA- DAY SQUARE-UP TRANSACTIONS, AS SPECULATION LOSS U/S 43(5) OF THE I I ACT WITHOUT CONSIDERING THE NATURE OF BUSINESS OF THE A PPELLANT AND THE DETAILS FILED BY THE APPELLANT ON RECORD OF THE LEARNED AO. 2. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE IS INVOLVED IN THE BUSINESS OF ARBITRAGE TRANSACTIONS IN THE STOCK MAR KET. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OF FICER NOTED THAT THE ASSESSEE HAS DEBITED A SUM OF RS.2,27,20,508/ - AS INTEREST PAYMENTS. THE BALANCESHEET REVEALS THAT THE ASSESSE E HAS ADVANCED THE FOLLOWING LOANS TO THE FOLLOWING PERSONS WITHOUT C HARGING INTEREST:- SN NAME OF THE CONCERN RELATIONSHIP SUM ADVANCED (RS.) INTEREST CHARGEABLE @ 12% (RS.) 1. SHILPA JAIN DAUGHTER 1174935 122698 2. SAURABH JAIN SON 3177937 306283 428981 SHRI SURESHCHAND S. JAIN 3 HE FURTHER OBSERVED THAT THE ASSESSEE IS IN THE HABIT OF UTILIZING DIRECTLY OR INDIRECTLY, ITS INTEREST BEARING FUNDS FO R GIVING LOANS TO HIS SISTER CONCERNS AT NOMINAL INTEREST RATES. HE HELD THA T SUCH AN INTEREST FREE LOAN IS OUT OF INTEREST BEARING FUNDS AND THE A SSESSEE HAS FAILED TO PROVE THE NEXUS BETWEEN THE ADVANCE OF INTEREST-FREE LOANS TO HIS RELATIVES AND RECEIPT OF INTEREST FREE FUNDS FROM CRE DITORS. ACCORDINGLY, HE CALCULATED THE PROPORTIONATE INTEREST @ 12% AND DISA LLOWED A SUM OF RS.4,28,981/-. 3. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESS EE HAS CLAIMED LOSS FROM SHARE TRADING WHICH WAS SET OFF AGA INST INCOME FROM OTHER ACTIVITIES. HE REQUIRED THE ASSESSEE TO FURNISH TH E DETAILS OF SHARE TRADING DELIVERY BASED AND NON DELIVERY BASED TRANSACTIONS. IN RESPONSE, THE ASSESSEE FURNISHED THE WORKING OF NON DELIVERY BASED TRANSACTIONS ON WHICH LOSS WAS WORKED OUT AT RS.4,85,6 ,677/-. HE HELD THAT AS PER PROVISIONS OF SECTION 43(5) ANY TRANSACTION S IN WHICH A CONTRACT IS SETTLED OTHERWISE THAN BY THE ACTUAL DELIVER Y, IS A SPECULATING TRANSACTION. THE ASSESSEE HAD FURTHER SU BMITTED THAT HE IS ENGAGED IN THE BUSINESS OF ARBITRAGE ACTIVITY BETWEEN CAPITAL MARKET AND DERIVATIVE SEGMENT. ALL THE TRANSACTIONS ENTERED IN T HE CAPITAL MARKET FOR THE PURPOSE OF HEDGING AND HENCE IT CANNOT BE CONSIDERED AS SPECULATIVE TRANSACTIONS. THE ASSESSING OFFICER REJECTED THE SHRI SURESHCHAND S. JAIN 4 ASSESSEES CONTENTION AND HELD THAT IT IS SPECULATIVE LOSS AND AS PER THE PROVISIONS OF SECTION 73 SUCH SPECULATIVE LOSS CAN NOT BE SET OFF AGAINST OTHER BUSINESS INCOME. ACCORDINGLY, HE DISAL LOWED THE SPECULATION LOSS OF RS.48,56,677/-. 4. BEFORE THE LD. CIT(A), REGARDING DISALLOWANCE OF INTEREST, THE ASSESSEE SUBMITTED THAT HE HAD SUFFICIENT SURPLUS FU NDS WHICH ARE INTEREST FREE AND THEREFORE, THERE CANNOT BE PRESUMP TION THAT THE ASSESSEE HAD ADVANCE LOAN TO THE RELATED PERSON/SISTER CONCERN OUT OF BORROWED FUNDS. THE LD. CIT(A) REJECTED THE ASSESSEE S CONTENTION MAINLY ON THE GROUND THAT AVAILABILITY OF OWN FUNDS D OES NOT NECESSARILY LEADS TO AN INFERENCE THAT BORROWED FUND S, WERE NOT UTILISED FOR ADVANCING INTEREST FREE LOAN. IN ABSENCE OF ANY MATERIAL TO ESTABLISH THE CONTENTIONS OF THE ASSESSEE, HE CONFIRMED THE SAID DISALLOWANCE. 5. REGARDING TREATMENT OF BUSINESS LOSS OF RS.48,56, 677/- AS SPECULATION LOSS, THE ASSESSEE BEFORE THE CIT(A) RELI ED UPON THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2004-05, WHEREIN THIS ISSUE WAS DECIDED IN THE FAVOUR OF THE ASSESSEE. HOWEVER, THE LD. CIT(A) HELD THAT THE DECISION OF THE TRIBUNAL IS DISTINGUISHABLE INSOFAR AS IN THAT YEAR LOSS WAS ON F & O SEGMENT WHI CH WAS TREATED SHRI SURESHCHAND S. JAIN 5 AS SPECULATION LOSS WHICH IS NOT APPLICABLE IN THE C URRENT YEAR. HE CONFIRMED THE FINDING OF THE AO AFTER OBSERVING AND HELD AS UNDER: 5.3 FROM THE FACTS MENTIONED BY THE A.O. AS WELL AS THOSE MENTIONED BY THE APPELLANT IN ITS WRITTEN SUBMISSION, THE ADMITTED FACTS ARE THE LOSS OF RS.48,56,677/- HAD BEE N INCURRED ON INTRADAY (NON DELIVERY) TRANSACTIONS IN CASH SEGME NTS. THE LOSS OF RS.48,56,677/- IS, THEREFORE, UNDENIABLY ON TRANSACTIONS WHICH HAVE BEEN SQUARED UP WITHOUT TAKING DELIVERY OF SHARES WHICH IS SPECULATIVE LOSS AS PER THE PROVISIONS OF SECTIO N 43(5) WHICH CANNOT BE SET OFF AGAINST ANY OTHER PROFIT EXCEPT P ROFIT FROM SPECULATIVE TRANSACTIONS, THE A.O. HAD TREATED THE LOSS OF RS.48,566771- AS LOSS ARISEN FROM SPECULATION TRANSACTIONS DENYING ASSESS EE'S CLAIM OF ADJUSTMENT OF SUCH LOSS AGAINST REGULAR SHARE TRADI NG INCOME AS WELL AS INCOME EARNED FROM THE INVESTMENT IN IPO AS ADJUSTM ENT WHICH IS REQUIRED TO BE SUSTAINED. SIMILARLY, THE ASSEESSEE' S SUBMISSION DURING THE ASSESSMENT PROCEEDING THAT SUCH TRANSACTION WAS HEDGING IN NATURE IS WITHOUT ANY BASIS AS I FIND THAT DESPITE RAISING SU CH CONTENTION, THE APPELLANT HAS FAILED TO PUT FORTH ANY REASON FOR JU STIFICATION FOR TREATING THE TRANSACTION BEING INTRADAY NON DELIVERY TRANSACTION IN CASH SEGMENT AS HEDGING TRANSACTION. THE DISALLOWANCE OF LOSS OF RS .48,56,677/- IS, THEREFORE, UPHELD, HE ADDITION OF RS,48,56,6771- IS CONFIRMED, THE APPEAL ON THIS GROUND IS NOT ALLOWED. 6. BEFORE US LEARNED COUNSEL, SHRI RAKESH JOSHI ON THE FIRST ISSUE, SUBMITTED THAT, ASSESSEE HAD HUGE FUNDS IN THE CAPITA L ACCOUNT WHICH WAS TO THE TUNE OF RS.469,086,370/-, AND OUT OF SUCH A HUGE CAPITAL, SHRI SURESHCHAND S. JAIN 6 THE ADVANCE GIVEN TO THE RELATED CONCERNS WERE LESSTH AN RS.44,00,000/- WHEREAS, THE UNSECURED LOAN ARE ONLY RS. 41,863,882/. IF THE ASSESSEE HAD HUGE SURPLUS FUNDS, THEN PRESUMPT ION WOULD BE DRAWN THAT, SUCH A FUND HAVE BEEN UTILIZED FOR THE P URPOSE OF GIVING ADVANCE TO THE SISTER CONCERNS/RELATIVES. IN SUPPORT OF HIS CONTENTIONS STRONGLY RELIED UPON THE DECISION OF HONBLE BOMBAY H IGH COURT IN THE CASE OF RELIANCE UTILITIES LTD., REPORTED IN 313 ITR 340. REGARDING SECOND ISSUE, HE SUBMITTED THAT THE ASSESSEE IS MAINL Y INVOLVED INTO BUSINESS OF HEDGING AND ARBITRAGE AND ON THESE FACTS SIMILAR ISSUE WAS, DECIDED IN THE ASSESSEES OWN CASE FOR THE A.Y. 2004 -05 BY THE TRIBUNAL, WHEREIN THE TRIBUNAL AFTER GIVING DETAILS R EASONS HELD THAT; FIRSTLY, THE ASSESSEE IS NOT A COMPANY BUT AN INDIVIDU AL AND THEREFORE, HE IS NOT COVERED BY SECTION 73 AND FURTHER THE TRIBUN AL HAS HELD THAT ARBITRAGE RECEIPT CAN BE SAID TO BE AS PART OF ASSESSE ES BUSINESS INCOME. 7. ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON THE ORDER OF THE CIT(A). 8. WE HAVE HEARD RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FINDINGS GIVEN IN THE ORDERS AND ALSO MATERIAL REFE RRED TO BEFORE US. SO FAR AS THE ISSUE OF PROPORTIONATE DISALLOWANCE OF RS. 4,28,981/- IS CONCERNED, IT IS SEEN THAT THE ASSESSEE HAS ADVANCED L OAN OF SHRI SURESHCHAND S. JAIN 7 RS.43,52,872/- TO HIS DAUGHTER AND SON. THE DEPARTMEN TS CASE IS THAT THE ASSESSEE IS PAYING INTEREST ON UNSECURED LOANS AND THEREFORE, SUCH AN ADVANCE CANNOT BE SEGREGATED FROM THE BORROWED FU NDS. ON THE OTHER HAND, THE ASSESSEES CASE IS THAT, IN HIS PERSO NAL CAPITAL ACCOUNT, HE HAS HUGE CAPITAL OF RS.47 CRORES (APPROXIMATELY), WHEREAS UNSECURED LOAN IS ONLY RS.41.86 LACS. THUS, THERE C ANNOT BE A PRESUMPTION THAT THE LOAN HAS BEEN ADVANCED OUT OF BOR ROWED FUNDS ONLY. IN PRINCIPLE, WE AGREE WITH THE CONTENTION OF THE ASSESSEE THAT, IF THE ASSESSEE HAS HUGE SURPLUS FUNDS EITHER IN THE FOR M OF HIS CAPITAL OR INTEREST FREE LOANS, THEN THE PRESUMPTION IS THAT AN Y ADVANCE OR LOAN GIVEN TO RELATED PARTIES OR SISTER CONCERNS (WITHOUT CH ARGING INTEREST) IS FROM HIS OWN CAPITAL OR SURPLUS FUNDS OR INTERES T FREE FUNDS. THIS PROPOSITION HAS BEEN UPHOLD BY THE HONBLE BOMBAY HIG H COURT IN THE CASE OF RELIANCE UTILITY LTD.(SUPRA). HOWEVER, FROM TH E PERUSAL OF THE CIT(A) ORDER, IT IS SEEN THAT THE ASSESSEE HAS WORKED OUT AND QUANTIFIED THE AMOUNT OF INTEREST WHICH CAN BE DEEMED TO BE RELATABLE TO BORROWED FUNDS USED FOR GIVING INTEREST FREE LOAN. SUCH A QUANTIFICATION WAS ARRIVED AT RS.35,133/-. THE ASSES SEES QUANTIFICATION FOR DISALLOWABLE INTEREST HAS BEEN REJ ECTED BY THE CIT(A), WITHOUT EXAMINING THE SAME ON MERITS, EXCEPT F OR HOLDING THAT THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL TO ESTABLISH THAT THE ASSESSEES OWN FUNDS WERE AVAILABLE AT THE TIME OF ADVANCING. SUCH A SHRI SURESHCHAND S. JAIN 8 CONTENTION IS PURELY GENERAL IN NATURE. IF THE ASSESSE E HAS POOL OF MIXED FUNDS CONSISTING OF MOSTLY HIS OWN FUNDS WHICH ARE INTEREST FREE AND PARTLY BORROWED FUNDS, THEN THE ASSESSEE NEED N OT TO ESTABLISH DAY TO DAY AVAILABILITY OF FUNDS, AT THE TIME OF MAK ING THE ADVANCES. FROM THE MATERIAL PLACED BEFORE US, IT IS SEEN THAT THE ASSESSEES AVAILABILITY OF OWN FUNDS IS FAR MORE IN EXCESS, THA N THE LOAN GIVEN TO THE RELATIVES AND THEREFORE, THE PRESUMPTION WOULD BE TH AT, SUCH LOAN MUST HAVE BEEN GIVEN FROM OWN FUNDS AND NOT FROM THE INTEREST HAVING LOANS. ACCORDINGLY, THE PROPORTIONATE DISALLO WANCE AS QUANTIFIED BY THE ASSESSEE BEFORE CIT(A) AT RS.35,133/- IS CON FIRMED AND THE BALANCE AMOUNT OF DISALLOWANCE IS DELETED. ACCORDING LY, GROUND NO.1 IS PARTLY ALLOWED. 9. NOW COMING TO THE ISSUE OF TREATING LOSS IN SHARE TRADING BUSINESS AS SPECULATION LOSS, IT IS SEEN FROM THE REC ORDS, THAT THE ASSESSEE HAS GIVEN THE FOLLOWING DETAILS OF HIS SOU RCE OF TRADING INCOME. A DETAILS OF SHARE TRADING INCOME PARTICULARS AMOUNT AMOUNT SHARE TRADING INCOME AS PER PROFIT AND LOSS ACCOUNT 1,73,63,745 1. EQUITY CAPITAL MARKET SEGMENT DELIVERY PROFIT/(LOSS) 3,25,49,288 SPECULATION PROFIT /(LOSS) (48,56,677) 2,76,92,611 2. FUTURES & OPTIONS SEGMENT (1,03,28,866) TOTAL: 1,73,63,745 SHRI SURESHCHAND S. JAIN 9 DETAILS OF SHARE TRADING INCOME DURING THE YEAR SR. NO. PARTICULARS HEDGING OTHER TOTAL 1 EQUITY CAPITAL MARKET SEGMENT DELIVERY PROFIT/(LOSS) 3,25,49,288 3,25,49,288 SPECULATION PROFIT(LOSS) (49,80,148) 1,23,471 (48, 56,677) 2 FUTURE & OPTIONS SEGMENT 1,45,94,171 (2,49,23,037) (1,03,28,866) TOTAL 1,73,63,745 FURTHER FROM THE DETAILS OF HEDGING TRANSACTIONS, IT IS SEEN THAT THE ASSESSEE HAS BIFURCATED THE SAME INTO CAPITAL SEGMENT AND FUTURE & OPTIONS SEGMENT. THE ASSESSING OFFICER HAS HELD THAT L OSS OF RS. 48,56,677/- IN HEDGING IN EQUITY CAPITAL SEGMENT IS SPECULATION LOSS AND THEREFORE, IT CANNOT BE SET OFF AGAINST THE BUSIN ESS INCOME. THE ASSESSEES CASE WAS THAT THE LOSS OF RS.48,56,677/- W AS ON NON DELIVERY BASED TRANSACTIONS IN CASH SEGMENT AND IT CA NNOT BE SEGREGATED WITH THE DELIVERY BASED TRANSACTIONS WITHIN THE SAME SEGMENT. BOTH THE SEGMENTS ARE COMPOSITE BUSINESS OF TH E ASSESSEE. THE TRIBUNAL IN ASSESSEES OWN CASE IN THE APPEAL F ILED BY THE REVENUE HAD HELD THAT THE ENTIRE SHARE TRADING INCOME INCLUDING CASH SEGMENT AS WELL AS FUTURE & OPTIONS SEGMENT IS ONE AND COMPOS ITE INDIVIDUAL BUSINESS SEGMENT AND THEREFORE, AO WAS DIRECTED TO DE LETE MADE ON THE GROUND THAT IS WAS A SPECULATION LOSS FOR THE YEAR . THE RELEVANT OBSERVATION OF THE TRIBUNAL IN THIS REGARD WAS AS UND ER; SHRI SURESHCHAND S. JAIN 10 WE HAVE CONSIDERED THE ISSUE. THE ASSESSEE HAS CLAI MED THE LOSS AS BUSINESS LOSS BY NETTING OF THE PROFIT IN CASH SEGMENT TO THE LOSS IN DERIVATIVE SEGMENT. THE LEARNED CIT(A) HAS CONSIDERED THE NATURE OF TRANSACTIONS, LAW ON THE ISS UE, PROVISIONS OF THE ACT AND ULTIMATELY HELD HAT THE ASSE SSEES BUSINESS IS ONE OF COMPOSITE BUSINESS AND FINAL EFF ECT IS TO BE TREATED AS SPECULATIVE LOSS OR PROFIT FOR THE PURPOSE. THE ISSUE B BEFORE US IN THE REVENUE APPEAL IS NOT ABOUT TREATING THE LOSS AS SPECULATIVE LOSS OR BUSINESS LOSS. IT IS TRUE THAT TH E HONBLE ITAT IN VARIOUS REFERRED CASES, HAS HELD THAT THE DERIVATI VE LOSS CANNOT BE CONSIDERED AS SPECULATIVE LOSS BUT THOSE ARE IN A SSESSEES APPEALS. IN THIS CASE THE REVENUE IS CONTESTING ABOUT THE QUANTUM OF LOSS TREATED AS SPECULATIVE LOSS. SINCE THE FACT OF TREATING THIS AS SPECULATIVE LOSS OR PROFIT WAS UPHELD BY THE LEARNED CAIT(A) AND OBVIOUSLY HAS NOT CONTESTED BY T HE ASSESSEE BEFORE US, WE CANNOT GIVE ANY FINDING WHETHER THE SA ID LOSS CAN BE TREATED AS BUSINESS LOSS OR NOT. NOW THE ONLY ISSU E IS WHETHER THE AO WAS RIGHT IN TREATING THE LOSS OF RS.6.54,56,26 1/- AND THE EXPENDITURE THEREON AT RS.1,32,70,262/- AS SEPARATE LOSS NOT CONNECTED WITH THE PROFITS EARNED ON CASH SEGMENT. TH E LEARNED CIT(A) HAS GIVEN A FACTUAL FINDING AFTER EXAMINING T HE NATURE OF TRANSACTIONS, D-MAT ACCOUNT AND ARBITRAGE RECEIPTS TO H OLD THAT THE CASH SEGMENT AS WELL AS F&O SEGMENT HAS TO BE TR EATED AS ONE SINGLE BUSINESS. NOTHING WAS BROUGHT ON RECORD TO DIFFER FROM THE ABOVE FINDING OF THE LEARNED CIT(A). SINCE THE F INDING OF THE CIT(A) IS CORRECT ON THE FACTS THERE IS NO NEED TO DIFFER FROM THE FINDINGS AND ACCORDINGLY, THE REVENUES GROUNDS ARE REJECTED. THE REVENUE ALSO RELIED ON THE DECISION OF THE ITAT IN 88 ITD 53 WHICH IS THE CASE OF ANZ GRINDLAYS BANK VS. DCIT. TH E FACTS IN SHRI SURESHCHAND S. JAIN 11 THAT CASE WERE THAT THE FOREIGN BANK WAS ENGAGED IN B ANKING BUSINESS AND RELATED ACTIVITIES SUCH AS PURCHASE AND SALE OF SECURITIES. THE PURCHASE AND SALE OF SHARES WITHOUT ACTUAL DELIVERY WAS CONSIDERED AS SPECULATIVE LOSS UNDER S ECTION 43(5) AND PROVISIONS OF SECTION 73 WERE MADE APPLICABLE IN THE DECISION. HOWEVER, THE FACTS IN THIS CASE ARE ENTIRE LY DIFFERENT. FIRST OF ALL THE ASSESSEE IS NOT A COMPANY TO BE COVER ED BY SECTION 73 AND THE ASSESSEE IS DOING HEDGING, ARBITRA GE AND DERIVATIVE BASED TRANSACTION IN THE STOCK EXCHANGE WHIC H WERE CONSIDERED AND ANALYSED BY THE LEARNED CIT(A) AND THE ENTIRE BUSINESS IS CONSIDERED AS SPECULATIVE BUSINESS. WE A RE NOT POSITION TO UNDERSTAND HOW THE REVENUE CAN RELY ON THE ABOVE SAID DECISION CONTENTION. BE THAT IT AS MAY, SINCE THE ISSUE BEFORE US IS WHETHER THE AO WAS RIGHT IN SEGREGATING CASH SE GMENT AND T F & O SEGMENT TREATING ONLY F & O LOSS AS SPECULAT IVE NATURE. WE AGREE WITH THE ORDER OF THE LEARNED CIT(A) THAT BOT H THESE BUSINESS ARE CONSIDERED AS A SINGLE UNIT AND THE NET EFFECT CAN ONLY BE TREATED AS SPECULATIVE LOSS OR PROFIT. IN V IEW OF THIS THE GROUNDS ARE REJECTED. 10. THUS, FOLLOWING THE SAME PRINCIPLE, WE HOLD THAT SUCH A LOSS WAS INCURRED IN THE COURSE OF THE SAME BUSINESS WHICH IS ONE AND COMPOSITE BUSINESS OF THE ASSESSEE, LOSS HAS TO BE S ET OFF FROM THE PROFIT OF THE SAME BUSINESS. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. SHRI SURESHCHAND S. JAIN 12 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DAY OF MARCH 2015. SD/- SD/- SD/ - . D. KRUNAKARA RAO ACCOUNTANT MEMBER SD/ - ! ! ! ! '# '# '# '# AMIT SHUKLA JUDICIAL MEMBER MUMBAI, 5& 5& 5& 5& DATED: 4 .03.2015 PATEL ' / +!6 76(! / COPY OF THE ORDER FORWARDED TO : (1) & '.! / THE ASSESSEE; (2) 1 / THE REVENUE; (3) 8() / THE CIT(A); (4) 8 / THE CIT, MUMBAI CITY CONCERNED; (5) 6;< +!& , , / THE DR, ITAT, MUMBAI; (6) <' = / GUARD FILE. ,6! +! / TRUE COPY '& / BY ORDER > / ? 1 / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI