Expl to s. 73: Speculation loss on transactions in derivatives can be set off against the gains of delivery shares

CIT vs. Baljeet Securities Pvt. Ltd (Calcutta High Court)

Under the Explanation to s. 73 where any part of the business of a company consists in the purchase and sale of shares of other companies, such company shall, for the purposes of the section, be deemed to be carrying on a speculation business to the extent to which the business consists of the purchase and sale of such shares. Therefore, the entire transaction carried out by the assessee was within the umbrella of speculative transaction. There was, as such, no bar in setting off the loss arising out of derivatives from the income arising out of buying and selling of shares.