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2019 (7) TMI 1217 - AT - Income TaxDerivative trading loss as business loss - AO has ignored clause (d) inserted in section 43 (5) by the Finance Act, 2005 w.e.f. 01.04.2006 and relied upon the decisions rendered prior to amendment - HELD THAT:- We are of the considered view that when undisputedly assessee has entered into transaction of derivatives after 01.04.2006 in a recognised stock exchange as per Circular No.2/2006 dated 25.01.2006, loss arising in F&O transaction has to be treated as business loss and not loss in speculative business. CIT (A) has rightly directed the AO to treat the derivative trading loss as business loss as per provisions contained u/s 43(5) clause (c) & (d) and the same has to be allowed to be set off against the other business income received by the assessee from the trading of Alcoholic Liquor. So, we are of the considered view that the contention raised by the ld. DR that section 73 Explanation 1 is a deeming provision applicable to the facts and circumstances of the case is not tenable as it does not talk of F&O transactions. The case law of CIT-I vs. Intermetal Trade Ltd. [2006 (7) TMI 130 - MADHYA PRADESH HIGH COURT] relied upon by the ld. DR is also not applicable to the facts and circumstances of the case. Consequently, finding no illegality or perversity in the impugned order passed by the ld. CIT (A), present appeal filed by the Revenue is hereby dismissed.
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