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2012 (6) TMI 82 - AT - Income TaxSet off of loss on trading in futures and options as business loss against business income - applicability of Explanation to section 73 to transactions entered into in 'Future and Options i.e. derivatives transactions of NSE - Revenue contending the same to be specualtion loss - Held that:- Transactions of 'Future and Options' are not shares although underlying asset for determining prices of future and options, which are shares, commodities, currencies etc. Future and options are in themselves the items, which are traded through stock exchange and not the underlying items to which 'future and options' relate. It means 'future and options' are not covered by Explanation to section 73 for the reasons that this is specifically excluded by way of clause (d) to section 43(5) w.e.f 01-04-06 by the Finance Act'05. It is clear that Explanation to section 73 refers to the business of purchase and sale of shares and not the business of derivative transactions carried out by recognized stock exchange by the assessee. Therefore, CIT(A) rightly allowed the set off of loss against normal business income - Decided against the Revenue.
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