WHITE WATER PARK (I) LTD, MUMBAI V. ITO 5(3)(4), MUMBAI

ITA 3628/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84546 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2014
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 25-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 22-05-2012
• Court: TRIBUNAL
• Department Lawyers: RUDOLPH N DSOUZA
• Keywords: Business income; Opportunity of being heard; Principle of natural justice; Transactions in derivatives; Speculation loss
• Section: 43(5); 56

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO , JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO. 3628/M/2012 (ASSESSMENT YEAR : 2007 - 20 0 8 ) WHIT E WATER PARK (I) LTD., 502, 5 TH FLOOR, DHAVALGIRI BLDG, NANA CHOWK, MUMBAI 400 036. / VS. ITO - 5(3)(4), MUMBAI. ./ PAN : AAACR 4649 D ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIJAY MEHTA / RESPONDENT BY : SHRI RUDOLPH N. DSOUZA, DR / DATE OF HEARING : 10.12 .2014 / DATE OF PRONOUNCEMENT : 18 .12.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 22.5.2012 IS AGAINST THE ORDER OF THE CIT (A) - 9, MUMBAI DATED 13.3.2012 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE LD CIT (A) HAS ERRED IN COMPLETING ASSESSMENT ORDER IGNORING THE LAW OF NATURAL JUSTICE TO HEAR ASSESSEE AND PROVIDE FRIAR OPPORTUNITY BEFORE PASSING THE ORDER GUIDE BY RULE OF JUSTICE AND EQUALITY. 2. THE LD CIT (A) HAS ERRED IN COMPLETING THE ASSESSMENT BY CONSIDERING THE HEDGE LOSS OF RS. 16,46,576/ - AS SPECULATIVE LOSS AS AGAINST THE NORMAL BUSINESS LOSS CLAIMED BY THE APPELLANT. 3. THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS IN TREATING THE INCOME OF RS. 12,01,727/ - ON ACCOUNT OF COMPENSATION IN THE FORM OF INTEREST AND PENALTY DIFFERENTLY FROM THE PR OFIT / LOSS THAT AROSE THE EXCHANGE OF TRANSACTIONS. 3. AT THE OUTS ET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ABOVE GROUNDS AND MENTIONED THAT GROUND NO.1 IS NOT PRESSED. AFTER HEARING BOTH THE PARTIES IN THIS REGARD, THE SAID GROUND N O.1 IS DISMISSED AS NOT PRESSED. 4. GROUND NO.2 RELATES TO CONSIDERING THE HEDGING LOSS OF RS. 12,01,727/ - AS SPECULATIVE LOSS. ASSESSEE CLAIMED THE SAME AS A NORMAL BUSINESS LOSS WHICH WAS DENIED BY THE ASSESSING OFFICER AND TREATED THE SAME AS SPECULATION LOSS. DURING 2 THE FIRST APPEL LATE PROCEEDINGS, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) CONFIRMED THE VIEW OF THE ASSESSING OFFICER AFTER OBTAINING THE REQUISITE REMAND REPORT FROM THE ASSESSING OFFICER. OTHERWISE, ASSESSEE RETURNED THE GAIN ON ACCOUNT OF FUTURES AN D OPTIONS (F&O) INCOME FROM MULTI COMMODITY EXCHANGE OF INDIA LTD (MCX) AMOUNTING TO RS. 19,62,892/ - AND EARNED THE LOSS ON ACCOUNT OF F&O LOSS FROM NATIONAL COMMODITY & DERIVATIVES EXCHANGE LTD (NCDEX) AMOUNTING TO RS. 36,09,468/ - . NET LOSS DEBITED IN TH E P&L ACCOUNT BY THE ASSESSEE IS RS.16,46,576/ - BY TREATING THE SAME AS BUSINESS INCOME BUT THE SAME WAS TREATED BY THE ASSESSING OFFICER AND THE CIT (A) AS SPECULATION LOSS OF THE ASSESSEE. CIT (A) DISCUSSED THIS ISSUE WRONGLY IN THE LIGHT OF THE PRO VISIONS OF SECTION 43(5) AS WELL AS EXPLANATION 2 TO SECTION 24(1) OF THE ACT. THE CONCLUSIONS ARE GIVEN IN PARA 5 (SUB - PARA 5.1 TO 5.1.18 OF THE IMPUGNED ORDER). 5. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT SIMILAR ISSU E CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL IN THE CASE OF M/S. VARSHA CORPORATION LTD VS. DCIT VIDE ITA NO.6534/M/2012 FOR THE AY 2009 - 2010, DATED 17.1.2014 WHEREIN THE TRIBUNAL HELD THAT THE IMPUGNED LOSSES ARE NOT COVERED BY THE AMENDMENT TO CLAUSE ( E) OF PROVISO TO CLAUSE 5 OF SECTION 43 OF THE ACT WHICH WAS INSERTED BY THE FINANCE ACT, 2013. IN THIS REGARD, WE FIND PARAS 11 TO 13 OF THE SAID ORDER OF THE TRIBUNAL ARE RELEVANT AND THEREFORE, THEY ARE REPRODUCED WHICH READ AS UNDER: 11. WE HAVE GIVE N OUR THOUGHTFUL CONSIDERATION TO THE SUBMISSIONS ADVANCED AT THE HANDS OF THE LEARNED COUNSEL FOR THE ASSESSEE AS WELL AS LEARNED DR FOR THE DEPARTMENT. ADMITTEDLY, MCX, THROUGH WHICH THE ASSESSEE HAS CARRIED OUT THE TRANSACTIONS, IS NOT A RECOGNIZED STOC K EXCHANGE AS REQUIRED UNDER THE PROVISIONS OF SECTION 43(5)(D) OF THE ACT. AS IT CAN BE SEEN FROM THE ABOVEMENTIONED NOTIFICATION DATED 29 11 - 2013, WHICH HAS BEEN RELIED UPON BY THE LEARNED AR, WHICH HAS ALSO BEEN REPRODUCED IN THE ABOVE PART OF THIS ORDER, THE MCX, THROUGH WHICH THE ASSESSEE HAS CARRIED OUT THE TRANSACTIONS, IS NOTIFIED AS A 'RECOGNIZED ASSOCIATION' FOR THE PURPOSES OF CLAUSE (E) OF PROVISO TO CLAUSE 5 OF SECTION 43 OF THE ACT. CLAUSE (E) OF PROVISO TO SUB - SECTION (5) OF SECTION 43 HAS RECENTLY BEEN INSERTED BY THE FINANCE ACT, 2013 W.E.F. 1ST AP RIL, 2014, WHICH READS AS UNDER : - '(E) AN ELIGIBLE TRANSACTION IN RESPECT OF TRADING IN COMMODITY DERIVATIVES CARRIED OUT IN A RECOGNIZED ASSOCIAT ION, SHALL NOT BE DEEMED TO BE A SPECULATIVE TRANSACTION.' THEREFORE, THE EXEMPTION TO THE TRANSACTIONS GIVEN BY THE STATUTE IS 3 W.E.F. 1 - 4 - 2014 AND THIS IS INSERTED BY THE FINANCE ACT, 2013. IN PURSUANCE OF THE AMENDMENT, NOTIFICATION NO.51, DATED 4 - 7 - 2013 HAS BEEN ISSUED BY THE CBDT, VIDE WHICH RULE 6DDD IS INSERTED IN THE INCOME TAX RULES. THE SAID NOTIFICATION READ AS UNDER : - INCOME - TAX (NINTH AMENDMENT) RULES, 2013 - INSERTION OF RULES 6DDC, 6 DDD AND FORM NO. 3BC NOTIFICATION NO.51/2013 [F.NO.142114/2013 - TPL]/SO 2017(E0, DATED 4.7.2013 IN EXERCISE OF THE POWERS CONFERRED BY CLAUSE (E) OF THE PROVISO TO CLAUSE (5) OF SECTION 43 READ WITH SECTION 295 OF THE INCOME - TAX ACT, 1961 (43 OF 1961), THE CENTRAL BOARD OF DIRECT TAXES HEREBY MAKES THE FOLLOWING RULES FURTHER TO AMEND THE INCOME - TAX RULES, 1962, NAMELY.' - (1) THESE RULES MAY BE CALLED THE INCOME - TAX (9TH AMENDMENT) RULES, 2013. (2) THEY SHALL COME INTO FORCE ON THE DATE OF THEIR PUBLICATION IN THE OFFICIAL GAZETTE. 2. IN THE INCOME - TAX RULES, 1962, IN PART II, IN SUB - PART C, AFTER RULE 6DDB, THE FOLLOWING RULES SHALL BE INSERTED, NAMELY : - '6DDC. CONDITIONS THAT A RECOGNIZED ASSOCIATION IS REQUIRED TO FULFILL TO BE NOTIFIED AS A RECOGNIZED ASSOCIATION FOR THE PURPOSES OF CLAUSE (E) OF THE PROVISO TO CLAUSE (5) OF SECTION 43. - FOR THE PURPOSES OF CLAUSE (E) OF THE PROVISO TO CLAUSE (5) OF SECTION 43, A RECOGNIZED ASSOCIATION SHALL FULFILL THE FOLLOWING CONDITIO NS IN RESPECT OF TRADING IN DERIVATIVES, NAMELY: - (I) THE RECOGNIZED ASSOCIATION SHALL HAVE THE APPROVAL OF THE FORWARD MARKETS COMMISSION ESTABLISHED UNDER THE FORWARD CONTRACTS (REGULATION) ACT, 1952 (74 OF 1952) IN RESPECT OF TRADING IN DERIVATIVES AND SHALL FUNCTION IN ACCORDANCE WITH THE GUIDELINES OR CONDITIONS LAID DOWN BY THE FORWARD MARKETS COMMISSION; (II) THE RECOGNIZED ASSOCIATION SHALL ENSURE THAT THE PARTICULARS OF THE CLIENT (INCLUDING UNIQUE CLIENT IDENTITY NUMBER AND P AN) ARE DULY RECORDED AND STORED IN ITS DATABASES; (III) THE RECOGNIZED ASSOCIATION SHALL MAINTAIN A COMPLETE AUDIT TRAIL OF ALL TRANSACTIONS (IN RESPECT OF DERIVATIVE MARKET) FOR A PERIOD OF SEVEN YEARS ON ITS SYSTEM; (IV) THE RECOGNIZED ASSOCIATION SHALL ENSURE THAT TRANSACT IONS (IN RESPECT OF DERIVATIVE MARKET) ONCE REGISTERED IN THE SYSTEM ARE NOT ERASED: (V) THE RECOGNIZED ASSOCIATION SHALL ENSURE THAT THE TRANSACTIONS (IN RESPECT OF DERIVATIVE MARKET) ONCE REGISTERED IN THE SYSTEM ARE MODIFIED ONLY IN CASES OF GENUINE ERR OR AND MAINTAIN DATA REGARDING ALL TRANSACTIONS (IN RESPECT OF DERIVATIVE MARKET) REGISTERED IN THE SYSTEM WHICH HAVE BEEN MODIFIED AND SUBMIT A MONTHLY STATEMENT IN FORM NO. 3BC TO THE DIRECTOR GENERAL OF INCOME - TAX (INTELLIGENCE AND CRIMINAL INVESTIGATIO N), NEW DELHI WITHIN FIFTEEN DAYS FROM THE LAST DAY OF EACH MONTH TO WHICH SUCH STATEMENT RELATES. 6DDD. NOTIFICATION OF A RECOGNIZED ASSOCIATION FOR THE PURPOSES OF CLAUSE (E) OF THE PROVISO TO CLAUSE (5) OF SECTION 43. - (1) AN APPLICATION FOR NOTIFICATIO N OF A RECOGNIZED ASSOCIATION (AS PER CLAUSE (J) OF SECTION 2 OF THE FORWARD CONTRACTS (REGULATION) ACT, 1952) AS A RECOGNIZED ASSOCIATION FOR THE PURPOSES OF CLAUSE (E) O F THE PROVISO TO CLAUSE (5) OF SECTION 43 MAY BE MADE TO THE MEMBER (LEGISLATION), CENTRAL BOARD OF DIRECT TAXES, NORTH BLOCK, NEW DELHI. (2) THE APPLICATION REFERRED TO IN SUB - RULE (1) SHALL BE ACCOMPANIED WITH THE FOLLOWING DOCUMENTS, NAMELY : - 4 (I) APPROVAL GRANTED BY FORWARD MARKETS COMMISSION FOR TRADING IN DERIVATIVES ; (II) UP - TO - DATE RULES, BYE - JAWS AND TRADING REGULATIONS OF THE RECOGNIZED ASSOCIATION; (III) C ONFIRMATION REGARDING FULFILLING THE CONDITIONS REFERRED TO IN CLAUSE (II) TO CLAUSE (V) OF RULE 6DDC; (IV) SUCH OTHER INFORMATION AS THE RECOGNIZED ASSOCIATION MAY LIKE TO PLACE BEFORE THE CENTRAL GOVERNMENT. (3) THE CENTRAL GOVERNMENT MAY CALL FOR SUCH OTHER INFORMATION FROM THE APPLICANT AS IT DEEMS NECESSARY FOR TAKING A DECISION ON THE APPLICATION. (4) THE CENTRAL GOVERNMENT, AFTER EXAMINING THE INFORMATION FURNISHED BY THE RECOGNIZED ASSOCIATION UNDER SUB - RULE (2) OR SUB - RULE (3), SHALL NOTIFY THE RECOGNIZED ASSOCIATION AS A RECOGNIZED ASSOCIATION FOR THE PURPOSES OF CLAUSE (E) OF THE PROVISO TO CLAUSE (5) OF SECTION 43 OR ISSUE AN ORDER REJECTING THE APPLI CATION BEFORE THE EXPIRY OF FOUR MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION IS RECEIVED. (6 ) THE NOTIFICATION REFERRED TO IN SUB - RULE (4) SHALL BE EFFECTIVE UNTIL THE APPROVAL GRANTED BY THE FORWARD MARKETS COMMISSION IS WITHDRAWN OR EXPIRED , OR THE NOTIFICATION IS RESCINDED BY THE CENTRAL GOVERNMENT. 3. IN THE SAID RULES, IN APPENDIX - 11, AFTER FORM NO. 3BB, THE FOLLOWING FORM SHALL BE INSERTED, NAMELY: - 'FORM NO. 3BC [SEE RULE 6DDC] MONTHLY STATEMENT TO BE FURNISHED BY A RECOGNIZED ASSOCIATION IN RESPECT OF TRANSACTIONS IN WHICH CLIENT CODES HAVE BEEN MODIFIED AFTER REGISTERING IN THE SYSTEM FOR THE MONTH OF________________ IN PURSUANCE TO THE AFOREMENTIONED NOTIFICATION, THE MCX HAS BEEN NOTIFIED AS 'RECOGNIZED ASSOCIATION' VID E NOT IFICATION DATED 29 - 11 - 2013 , CLAUSE (E) OF PROVISO TO SECTION 43(5), THEN SUCH BENEFIT CAN BE EXTENDED TO ASSESSEE ONLY IN RESPECT OF ASSESSMENT YEAR 2014 - 2015AS THE PROVISIONS OF CLAUSE (E) OF PROVISO TO SECTION 43(5) ARE INSERTED BY THE STATUTE W.E.F. 1 - 4 - 2014. HOWEVER, IN THE PRESENT CASE, THE TRANSACTIONS DONE BY THE ASSESSEE RELATE TO FINANCIAL YEAR 2008 - 09. FOR THESE TRANSACTIONS, THERE WAS NO PROVISIONS IN THE STATUTE TO GIVE THE BENEFIT TO THE ASSESSEE IN RESPECT OF TRANSACTIONS OF COMMODITIES, WHICH ARE ULTIMATELY SETTLED OTHERWISE THEN BY ACTUAL DELIVERY OR TRANSFER OF THE COMMODITY AS PER SECTION 43(5) OF THE ACT. 12. THE CASE RELIED UPON BY THE ASSESSEE ALSO DO NOT SUPPORT THE CASE OF THE ASSESSEE. IN CASE OF ACIT VS. ARNAV AKSHAY MEHTA (SUPR A), THE TRANSACTIONS RELATE TO STOCK EXCHANGE OF INDIA, WHICH IS MCX STOCK EXCHANGE, WHICH WAS NOTIFIED ON 22 - 5 - 2009 AND THE TRANSACTIONS WERE GOVERNED BY CLAUSE (D) OF THE PROVISO TO SECTION 43(5), WHICH WAS INSERTED BY THE FINANCE ACT, 2005 W.E.F. 1 - 4 - 20 06.THEREFORE, FOR THE TRANSACTIONS, WHICH WERE UNDER CONSIDERATION IN THAT CASE, WERE HELD TO BE NOT OF SPECULATIVE NATURE UNDER THE PROVISIONS OF CLAUSE (D) OF THE PROVISO TO SECTION 43(5) OF THE ACT AND THE SAID CASE RELATES TO ASSESSMENT YEAR 2007 - 08. T HE TRANSACTIONS ENTERED INTO BY THE ASSESSEE AFTER INSERTION OF CLAUSE (D) OF THE PROVISO TO SECTION 43(5), WERE HELD TO BE OF NON - SPECULATIVE NATURE AS THERE WAS A PROVISION ON THE STATUTE. HOWEVER, IN THE PRESENT CASE, WHEN THE PROVISION IN THE STATUTE I N THE SHAPE OF CLAUSE (E) OF THE PROVISO TO SECTION 43(5). 13. IN THE CASE OF CIT VS. NASA FINELEASE PVT. LTD. (SUPRA), THE CASE RELATES TO PROVISO (D) TO SUB - SECTION 5 OF SECTION 43 OF THE ACT AND THE SAID INSERTION WAS MADE BY THE FINANCE ACT, 2005 AND THE NATIONAL STOCK EXCHANGE AND BOMBAY STOCK EXCHANGE, THROUGH WHICH THE ASSESSEE IN THAT CASE HAD CARRIED OUT THE TRANSA CTION WERE NOTIFIED ON 25 TH JANUARY, 2006. IT WAS THE CASE OF THE ASSESSEE 5 THAT THE TRANSACTION CONDUCTED BY IT FROM JULY 2005 TO SEPTEMBER, 2005, CANNOT BE REJECTED FOR THE BENEFIT OF PROVISO (D) TO SUB - SECTION 5 OF SECTION 43(5) AS THERE WAS A PROVISION ON THE STATUTE IN THE SHAPE OF CLAUSE (D). THE LAPSE IN THE ISSUE OF NOTIFICATION ETC. WAS ONLY ON ACCOUNT OF DELAY BY CBDT. IT IS IN THESE CIRCUMSTANCES, THE HON'BLE HIGH COURT HAS UPHELD THE ORDER OF THE TRIBUNAL VIDE WHICH THE RELIEF WAS GIVEN TO THE AS SESSEE. THUS, IN THAT CASE, THERE WAS A PROVISION ON THE STATUTE UNDER WHICH THE ASSESSEE SOUGHT THE BENEFIT. HOWEVER, IN THE PRESENT CASE, AS MENTIONED EARLIER, PROVISIONS OF CLAUSE (E) OF THE PROVISO TO SECTION 43(5) DID NOT EXIST DURING THE PERIOD WHEN THE ASSESSEE CARRIED OUT THE TRANSACTIONS. IN VIEW OF ABOVE DISCUSSION, WE HOLD THAT ASSESSEE IS NOT ENTITLED TO CLAIM THE BENEFIT OF CLAUSE (E) OF THE PROVISO TO SECTION 43(5) OF THE ACT. 6. FROM THE ABOVE IT IS EVIDENT THAT THE SAID AMENDMENT TO SECTION 43(5) WAS BROUGHT IN BY THE AMENDMENT OF THE FINANCE ACT, 2005, THE EXCHANGES FOR WHICH THE TRANSACTIONS WERE CARRIED OUT WERE NOT RECOGNIZED AT THE RELEVANT POINT OF TIME. THEREFORE, THE LOSS IN QUESTION CONSTITUTES SPECULATION LOSS AS HELD BY THE CIT (A) WHO RELIED ON VARIOUS OTHER JUDGMENTS ON THE SUBJECT. IN OUR OPINION, THE ORDER OF THE CIT (A) IN THIS REGARD IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.2 IS DISMISSED. 7. GROUND NO.3 RELATES TO THE TREA TMENT TO THE INTEREST / PENALTY OF RS 12,01,727/ - . IN THIS REGARD, IT IS THE SUBMISSION OF THE ASSESSEE THAT THE SAID PENALTY WAS PAID IN CONNECTION WITH THE ABOVE REFERRED SPECULATION TRANSACTIONS. BY COMMONSENSE, THE EXPENDITURE SINCE INCURRED IN CONNEC TION SPECULATION BUSINESS, THE SAME SHOULD BE ALLOWED IN RELATION TO THE SPECULATION BUSINESS OF THE ASSESSEE. ASSESSEE MADE WRITTEN SUBMISSIONS BEFORE THE CIT (A) TO THAT EXTENT PARA 21 AND 22 OF PAGE 44 OF THE PAPER BOOK IS RELEVANT IN THIS REGARD. CIT (A) DID NOT ALLOW THE SAME INVOKING THE PROVISIONS OF SECTION 56 OF THE ACT. IT IS MENTIONED THAT THE CIT (A) IS UNDER WRONG IMPRESSION THAT THE SAID EXPENDITURE INCURRED IN CONNECTION WITH THE EARNING OF THE INTEREST INCOME WHICH IS NOT THE FACT. 8. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. WE HAVE GONE THROUGH THE ASSESSEES SUBMISSIONS VIDE PARA PARAS 21 AND 22 OF ITS SUBMISSIONS DATED 4.3.2011, A COPY OF WHIC H IS PLACED AT PAGE 33 OF THE PAPER BOOK. ON PERUSAL OF THE SAME, WE FIND THAT THERE IS NO FINDING OF THE FACT BY THE ASSESSING OFFICER IF THE SAID 6 PENALTY WAS INCURRED IN CONNECTION WITH THE IMPUGNED SPECULATION TRANSACTIONS. AS SUCH, THE CIT (A) IN PAR A 5.2 TO 5.2.3 WAS IN THE WRONG IMPRESSION THAT THE SAID EXPENDITURE HAS TO BE DECIDED IN VIEW OF THE PROVISIONS OF SECTION 56 OF THE ACT, WHICH IS NOT CORRECT POSITION. IN OUR CONSIDERED OPINION, FOR THE LIMITED PURPOSE OF FINDING THE FACT, THIS ISSUE SH OULD BE REMANDED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. WE ORDER ACCORDINGLY. IF THE ASSESSING OFFICER FIND THAT THE SAID PENALTY WAS INCURRED IN CONNECTION WITH THE ABOVE REFERRED SPECULATION TRANSACTIONS WHICH WAS THE SUBJECT MATT ER OF DISCUSSION IN CONNECTION WITH GROUND NO.2 OF THE APPEAL, ASSESSING OFFICER SHOULD ALLOW THE SET OFF AGAINST THE SPECULATION PROFITS OF THE ASSESSEE. ASSESSING OFFICER SHOULD GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY GROUND NO.3 IS ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOU NCED IN THE OPEN COURT ON 1 8 T H DECEMBER, 2014. S D / - S D / - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 1 8 /12/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI