TMI Blog2013 (11) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... lls - The assessee, having lack of knowledge about the contract note, did not desire for the contract note from sub-broker - The sub-broker has confirmed the transactions. The assessee has actually traded in derivatives, which is proved from all the trade confirmation reports and final settlement on record – Decided in favour of assesse. - - - - - Dated:- 15-5-2012 - Order The order of the Bench was delivered by Mehar Singh (Accountant Member).-The present appeal filed by the assessee is directed against the order dated November 18, 2011 passed by the learned Commissioner of Income-tax (Appeals) under section 250(6) of the Income-tax Act,1961 (in short "the Act"). In this appeal, the assessee has raised the following grounds of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The learned Commissioner of Income-tax (Appeals), upheld the findings of the Assessing Officer and dismissed the appeal of the assessee. The learned Commissioner of Income-tax (Appeals), decided the issue on the ground that the final settlement bill issued by the sub-broker is not proper and does not contain the particulars, such as time stamped, the contract note, and SEBI registration number of the trading member. The learned authorised representative submitted that eligible transactions of trading in derivatives carried out through recognised stock exchange, are deemed to be non-speculative, as per clause (d) of the proviso to section 43(5) of the Act. The Explanation to section 43(5) of the Act enumerates conditions of eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is non-speculative in nature. Therefore, such income cannot be set off against speculative loss and it is also observed that even if there are procedural violations and the transactions are not strictly eligible transactions, there is no dispute that these are transactions in derivative products and such transactions even under the definition of speculative transactions in section 43(5) are nonspeculative. The assessee has also referred to the memorandum explaining the provisions of the Finance Bill, 2005 and intention for introduction of section 43(5)(d). It is relevant to reproduce the memorandum as under : "Measures to rationalise the tax treatment of derivative transactions under the existing provisions (clause (5) of section 43) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot issued any contract note. On the other hand, the assessee, having lack of knowledge about the contract note, did not desire for the contract note from sub-broker. Both, the Assessing Officer and the Commissioner of Income-tax (Appeals) assumed that the entry was just of purchase of the derivative loss without corroborating their findings on the basis of material to be brought on record. The Revenue has failed to prove the factum that entries in respect of such transactions are sham. The sub-broker has confirmed the transactions. The assessee has actually traded in derivatives, which is proved from all the trade confirmation reports and final settlement on record. Having regard to the detailed submissions made by the assessee and the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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