TMI Blog2013 (12) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... The provisions of Sec. 87 & 88A to 88E also apply after the total income is computed u/s. 115JB of the Act - If the transaction on which STT is paid is included in the total income of the assessee where the total income is assessed either under the provisions of the Act or under Section 115JB when tax chargeable on such income is arrived at & it is from that tax which is chargeable, the tax paid u/s 88E is given deduction, by way of rebate, u/s 87 - The assessee is entitled to a deduction of the amount equal to the STT paid – Decided against Revenue. Disallowance of mark to market loss – Held that:- Following CIT Vs Arjan Khimji & Co [1978 (7) TMI 35 - BOMBAY High Court] - As per guidelines of SEBI, it is imperative to all who have open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee to the Stock exchange for trading through BOLT system constitute fees for technical services covered u/s. 194J and the assessee was liable to deduct tax at source while crediting the transaction charges to the account of the stock exchange. Therefore to the extent of the payment of transaction charges is concerned revenue succeeds and assessee fails. 4. So far as payment of leasline charges is concerned, the Tribunal in the case of DCIT Vs Sonal Shares Stock Brokers (P) Ltd 38 SOT 150 and in the case of ITO Vs Phoenix Shares Stock Brokers (P) Ltd 131 ITD 359 has categorically held that the stock exchange do not provide any technical services by installing VSAT net work. It is the facility provided to its members. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sum and substance of assessee's grievance is that the Ld. CIT(A) has erred in confirming the disallowance of Rs. 22,77,095/- being mark to market loss on close of the year in derivative transactions. 9. During the course of the assessment proceedings, the AO noticed that the assessee has booked loss on account of mark to market valuation of open positions in respect of futures. The AO was of the opinion that in respect of forward contracts, the loss actually materializes on the date when the contract is squared off and therefore added back to the amount of Rs. 22,77,095/-. 10. The assessee agitated this matter before the Ld. CIT(A) but without any success. The Ld. CIT(A) relied upon the decision of the Hon'ble Bombay High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the directions of the SEBI, the ICAI , which is the highest accounting body of the country , has issued necessary guidelines for the purposes of accounting mark to market losses. In view of this matter, we have no hesitation to hold that the losses booked on the close of the financial year in respect of open positions in futures is a crystallized liability and therefore allowable. We accordingly reverse the findings of the Ld. CIT(A) and direct the AO to allow the loss of Rs. 22,77,095/-. This ground of the assessee is allowed. 14. Ground No. 2 3 being directly related to the grievance raised by ground No. 1. Accordingly these grounds are also allowed. 15. In the result, the appeal filed by the Revenue is partly allowed and the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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