- (1.) This appeal under Section 260A of the Income-tax Act, 1961 is at the instance of an assessee and is directed against the order passed by the Incometax Appellate Tribunal "A" Bench, Kolkata, in ITA No. 369(Cal.) of 1996 for the assessment year 1991-92 by which the majority of the members dismissed the appeal thereby affirming the order passed by the authorities below.
(2.) It appears that a Division Bench of this Court at the time of admission of this appeal formulated the following substantial question of law: "Whether the explanation to Section 73 which creates a legal fiction by which the purchase and sale of shares specified in the said Explanation which is specifically used for the purpose of Section 73 as deemed speculation business can be applied to Sections 70, 71 and 72 and in determining the gross total income the said Explanation to Section 73 can at all be applied while considering the set off of loss under Sections 70 and 71 and carry forward of such loss such Section 72 of the Act?"
(3.) The facts giving rise to filing of this appeal may be summed up thus: The assessee filed return on 30th December, 1991 disclosing a loss of Rs.1,31,043/- and it was selected for scrutiny and the notices under Sections 143(2) and 142(1) were issued and served on the assessee. The controversy arose regarding the loss disclosed by the assessee for the purpose of sale of shares amounting to Rs.87,000/- being treated as speculation loss in view of the Explanation added to Section 73 of the Income-tax Act. On appeal, the CIT (A) was of the view that the Explanation to Section 73 of the Act was attracted in the instant case and the loss was regarded as a speculation loss. The contention of the assessee, on the other hand, was that the Explanation to Section 73 of the Act was not applicable in this case.;