COMMISSIONER OF INCOME TAX Vs. K L JHUNJHUNWALLA

JUDGEMENT

(1.) The assessee is an individual and the reference relates to the assessment year 1964-65. The assessee was carrying on the business of brokerage and purchase and sale of jute and hessian goods. The ITO found that both the purchase and sale transactions in the business of jute and hessian goods were settled otherwise than by actual delivery. He, therefore, treated the business of purchase and sale of jute and hessian goods as speculation business. The ITO, however, further held that the income from brokerage on the purchase and sale of jute and hessian goods could not be treated as speculation income, since it was a business apart from speculation in jute and hessian goods. The result was that the net speculation loss of Rs. 340 was carried forward and not set off against the net brokerage income of Rs. 43,982.

(2.) Against the order of the ITO, the assessee went up in appeal to the AAC who held that since the brokerage was received and ,paid on purchases and sales of jute and hessian goods, which were settled otherwise than by actual delivery, it was part and parcel of the same business and, therefore, the receipts and payments of brokerage should also be treated as part of the speculation business.

(3.) Being aggrieved with the order of the AAC, the Department filed an appeal before the Appellate Tribunal. The Appellate Tribunal, following the order in the case of Mr. Bilas Rai & Co., held that the brokerage on purchase and sale of hessian goods should also be treated as speculation business and, therefore, confirmed the order of the AAC on this point.