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TMI Blog2014 (5) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income for the Assessment Year 2005-06 on 30th October 2005. The Respondent issued a notice under section 142(1) of the Income Tax Act 1961 calling upon the Petitioner to furnish certain information and explanations. The Petitioner replied thereto by its letter dated 18th July 2007. Paragraphs 6 and 7 of the reply which are relevant to the present Petition read as under:- "6. V SAT DEPOSIT W/OFF : V SAT is one of the modes of connectivity with the National Stock Exchange of India Ltd. The same is provided by the exchange upon a deposit and annual charges being paid to NSE. vide circular No.389 download reference No.NSE/MEM/4818, NSE had clarified the details of availing or surrender of V SAT. If a V SAT that has been activated after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt the Securities Contracts (Regulation) Act 1956 (SCRA) defines 'derivative' to include 1. A security derived from the debit instrument, share, loan whether secured or unsecured, risk instrument or contract for differences or any other form of security. 2. A contract which derives its value from the prices, or index of prices, of underlying securities. Derivatives are securities under the SCRA was amended in December 1999 to include derivatives within the ambit of 'securities' and the regulatory framework was developed for governing derivatives trading. Hence the same is treated as business income as the profit and loss from the purchase and sale of the shares (which is the underlying of the derivatives) is treated as in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surrender of the terminal, only Rs.50,000/- was refunded to the Petitioner, the balance Rs.1,50,000/- being retained by the NSE. The details in respect of this very issue was sought for by the Assessing Officer. The same was furnished by the Petitioner at paragraph 6 of its letter dated 18th July 2007 quoted earlier. The Respondents are unable to show that any other material or even issue remained to be disclosed and set out. The proposed reopening therefore as far as point No.1 is concerned is not sustainable. 7. The second point mentioned in the reasons is a Notification dated 25th January 2006 issued by the CBDT notifying the NSE as a recognised Stock Exchange for the purpose of section 43(5)(b) with effect from 25th January 2006. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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