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2010 (4) TMI 714 - AT - Income TaxSpeculative transaction - Whether the transactions in derivatives and futures as business (hedging) transactions or speculative transactions - In the profit and loss account, the assessee had debited loss on account of Nifty hedging transactions of1,30,41,270 - The Board Circular itself says that only excess of the assessee’s position in forward market over actual stock held in ready market should be considered as speculative - To this extent, plea of the assessee is accepted and the Assessing Officer is directed to work out speculation loss by taking excess of the assessee’s position in forward market over actual stock in ready market and work out the speculative loss proportionately - Appeal is partly allowed STCG or business income - The onus will be of course on the assessee to show that the shares have been correctly so held as investments notwithstanding the fact that he is a trader in shares - The Supreme Court in its decision in the case of Karam Chand Thapar Bros. P. Ltd. Vs. CIT, 1971 -TMI - 6302 (sc) has observed that the circumstances that the assessee has shown particular shares in its books as well as balance sheet as investments is a relevant factor in deciding whether the shares are investment or stock in trade - Held it is short term capital gain - Appeal of the revenue is partly allowed
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