C I T-CENTAL JAIPUR vs. PRAKASH CHAND JAIN

Order 19/04/2018 By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal in part preferred by the assessee. This Court while admitting the matter framed following question of law:- “Whether the Tribunal was justified in reversing the findings given by Assessing Officer as well as CIT(A), thereby deleting the addition of Rs. 1,34,62,163/- by holding that the transactions of jobbing/arbitrage entered into by the assessee are not speculative transaction and proviso © of Section 43(5) of the Act is applicable in the case of the assessee, despite the assessee failing to meet the mandatory conditions provided in the said proviso?” The identical matter for the same assessee came to be considered by this Court in case of Commissioner of Income Tax

(2 of 4) [ITA-18/2014] vs. Shri Prakash Chand Jain (DBITA No. 16/2014) decided on 18th September, 2017 wherein it has been held as under:- “6. Gupta [2014] 361 ITR 387 (Allahabad) wherein it has been held as under:- “27. The Tribunal having returned a finding that the details of each and every transaction were disclosed by the assessee which were part of the paper book. No discrepancy in any of the transactions can be pointed out by the Assessing Officer nor the bona fide of the transactions were doubted, the transaction thus carried out were part of the "jobbing" within the meaning of Kumar Agarwal [2001] 249 ITR 233 (All) wherein it has been held as under:- “2. The assessee is a share broker and filed his return of income on December 13, 1994. The assessment was completed under Section 143(3) of the Income Tax Act, 1961. During the course of assessment proceedings, the Assessing Officer had found that the assessee had at times settled the share transactions by corresponding deliveries and at times settled the contract without effecting the delivery. On an examination of invoice bills, the Assessing Officer found that the assessee had earned a profit of Rs. 32,80,949 and suffered a loss of Rs. 1,10,14,010, thereby incurring a net loss of Rs. 77,33,061. It was held that this was speculative transaction within the meaning of Sub-section (5) of Section 43 of the Income Tax Act. Invoking the provisions of Section 73 of the Income Tax Act, the Assessing Officer held that the speculative loss of Rs. 77,33,061 could not be allowed to be set off against the profit of general business of the assessee. The order was affirmed

(3 of 4) [ITA-18/2014] by the Commissioner of Income Tax (A)-1, Kanpur. The Income Tax Appellate Tribunal in appeal held that the assessee was entitled to the exception covered by Clause (c) of the proviso to Section 43(5) of the Income Tax Act, which reads as under : "a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member ; shall not be deemed to be a speculative transaction ;"

Deo MANU/SC/0059/1958MANU/SC/0059/1958

: [1959]35ITR312(SC) . It further found that no material was collected at the appellate stage to show that the condition was fulfilled. Learned counsel for the applicant has not shown that there was any material to show that the assessee was not entitled to the exception, referred to above. It may also be noted that the applicant has not sought any question to be referred in regard to proviso, Clause (c) to Sub-section (5) of Section 43 of the Income Tax Act.”

The appeal stands dismissed. (VIJAY KUMAR VYAS),J (K.S.JHAVERI),J A.Sharma/96