Speculation Loss can be set off against Delivery Based Profits

The assessee earned a profit on sale of shares held as stock-in-trade. This profit was offered as profit from a ’speculation business’ and was set off against a ’speculation loss’ brought forward from an earlier assessment year. The AO took the view that the profit from sale of shares was not from a ’speculation business’ on the ground that the assessee had settled its transaction of sale and purchase of shares through physical delivery.

On appeal by the Revenue, HELD affirming the Tribunal’s order:

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Ok, now my Doubt is, what if assessee is not a company, then does all trading is shares, irrespective of delivery or non delivery be treated as speculation business?

Speculative transactions In case of a company, if part of its business consists of dealing in shares then all types of transactions, whether delivery based or non-delivery based, will be treated as speculative transactions.