RAGHUNATH DAS PRAHLAD DAS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, Messrs. Raghunath Das Prahlad Das of Mathura, the Income-tax Appellate Tribunal, Delhi Bench B, has referred the following question in respect of the assessment year 1963-64 for the opinion of this court:

(2.) THE assessee is a registered firm working as commission agent in a number of commodities such as coconut, munghpali, sarson, etc. It also purchased and sold those commodities on its own account. In respect of those commodities the assessee also entered into transactions which admittedly were speculative transactions. During the months of September and October of 1961, which fell within the previous year relevant to the assessment year 1963-64, the assessee had purchased certain quantity of ready sarson. It also entered into forward contracts for sale of 7,169 units of sarson (delivery to be effected during the months of November, 1961, and May, 1962). During the months of October to May, 1962, the assessee further entered into forward contracts for the purchase of 7,160 units of sarson, to be delivered during the months of November, 1961, and May, 1962. THE assessee admits that all these forward contracts of sale and purchase in respect of 7,160 units of sarson were ultimately settled without taking or effecting actual delivery of the goods purchased or sold. On these transactions the assessee earned profits amounting to Rs. 2,69,047 and suffered losses amounting to Rs. 3,15,322. Net result was a loss of Rs. 46,275.

(3.) SECTION 43(5) of the Income-tax Act, 1961, runs thus : "' 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 :