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2022 (7) TMI 843 - AT - Income TaxAdditional income from F&O transactions - AO compared the details supplied by the assessee with the information received from stock exchange / commodity exchange and observed certain differences - HELD THAT:- We observe that the Ld. AR has explained the methodology of F&O transactions in the first instance - AR has, by means of the illustrations of various transactions appearing in the Statement of M/s Max Stock Broking Pvt. Ltd., explained vehemently that the impugned purchase / sale transactions were the open outstanding contracts of F&O which were done in the previous year 2014-15 and expired in the previous year 2015-16. AR is right in stating that these purchase / sale transactions, though outstanding on 31.03.2015, did not represent closing / opening stocks of assessee. We also find strength in the argument of the AR that the loss arising from daily marking of these open outstanding transactions is allowable as per the decision in DCIT Vs. Edelweiss Capital Ltd. (2012 (10) TMI 223 - ITAT, MUMBAI] - In view of the peculiar nature of F&O transactions submitted by the Ld. AR, we are of the view that the Ld. AO has wrongly treated the open outstanding contracts as closing / opening stocks of the assessee and made re-working of profit. Therefore, the addition made by Ld. AO is not correct and deserves to be deleted. Accordingly, we accept the ground of assessee and delete the addition. - Decided in favour of assessee.
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