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2015 (10) TMI 588 - ITAT JAIPUR

2015 (10) TMI 588 - ITAT JAIPUR - TMI - Disallowance of loss suffered in NCDEX transaction - Held that:- It is undisputed that NCDEX terminal was not a recognized stock exchange as per Rule 6DDB r.w.s. 43(5)(d) of the Income Tax Act, 1961 at the relevant time. Ld. CIT(A) treated the loss as speculative we find no valid reason to deviate from the same. In the interest of judicial discipline, we respectfully follow the same and uphold ld. CIT(A) order. - Decided against assessee.

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penalty of ₹ 10,000/- which is deleted. - Decided against Revenue. - ITA No. 599/JP/2013, ITA No. 90/JP/2013 - Dated:- 11-8-2015 - SHRI R.P. TOLANI AND SHRI T.R. MEENA, JJ. For The Assessee : Shri P.C. Parwal , CA For The Revenue : Smt. Neena Jeph, JCIT ORDER PER R.P. TOLANI, JM The Assessee has filed both the appeals against two different orders of the ld. CIT(A), Alwar dated 22-03-2013 and 29-11-2012 for the assessment year 2008-09 respectively. 2.1 First of all, we take up the appeal o .....

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e day late in filing of an appeal. 3.2 After hearing the ld. DR , we are inclined to condone the delay of one day in filing the appeal by the assessee. 4.1 Brief facts of the case are that the assessee derives income from trading of agricultural produce on whole sale basis and is also a commission agent. During the year he has debited loss of ₹ 5,31,132/- arising from NCDEX transactions. In course of assessment proceedings, assessee submitted the ledger account of NCDEX transactions and co .....

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s of account of Arjit & Co. and the copy of trading account of the NCDEX transaction wherein the loss of ₹ 5,31,132/- is suffered by the assessee is submitted. Assessee further submitted that he has entered into derivative transaction which cannot be considered as speculative transaction because of the inherent nature of such transactions. The ld. CIT(A) called for the remand report from the AO which was filed vide his report dated 13-12-2012 in which the AO accepted that impugned tran .....

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t is not proved that the NCDEX is a recognized stock exchange and notified by the Central Government. 4.3 The CIT(A) after considering the remand report observed that NCDEX terminal is not a recognized stock exchange as per Rule 6DDB r.w.s. 43(5)(d) of the Income Tax Act, 1961. He therefore, relying on the decision of ITAT Jaipur Bench in ITA No. 91/JP/2013 dated 20.02.2013 in case of Prem Prakash Uma Shankar disallowed the loss by holding it to be a speculative loss. 4.4 The ld. Counsel for the .....

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in a recognized association shall not be regarded as speculative transaction. The Finance Minister in his speech in introducing the Finance Bill, 2013 explained the amendment as under:- 149. There is no distinction between derivative trading in the securities market and derivative trading in the commodities market, only the underlying asset is different. It is time to introduce Commodities Transaction Tax (CTT) in a limited way. Hence, I propose to levy CTT on non-agricultural commodities futur .....

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rivative trading in securities and the derivative trading in the commodities. Section 43(5)(d) was inserted w.e.f. 01.04.2006 whereby derivative trading in securities were held not be a speculative transactions. NCDEX is also notified as a recognized association for the purpose of section 43(5)(e) vide Notification dt. 27.11.2013. Therefore, transaction of commodity derivative in NCDEX is not a speculative transaction as specifically provided u/s 43(5)(e) w.e.f. 01.04.2014. 3. From the above pro .....

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he lower authorities. 4.7 We have heard the rival contentions and perused the materials available on record. It is undisputed that NCDEX terminal was not a recognized stock exchange as per Rule 6DDB r.w.s. 43(5)(d) of the Income Tax Act, 1961 at the relevant time. Ld. CIT(A) while treating the loss as speculative has relied on ITAT Jaipur Bench judgment in ITA No. 91/JP/2013 dated 20.02.2013 in case of Prem Prakash Uma Shankar. Since the issue has been decided by the coordinate Bench, we find no .....

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