TMI Blog2016 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Stock Exchange conducting their business control under SEBI during the course of its business transactions, therefore, we are of the opinion that the National Stock Exchange is not a statutory body and any penalties or fines paid as the case may be under regulations and bye-laws can be considered as regulations for controlling the internal obligations and therefore, facts of aforesaid order applicable to the facts on hand. - Decided against revenue - I.T.A No. 2272/Kol/2013 - - - Dated:- 8-7-2016 - Shri P.M. Jagtap , Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Appellant/ department: Shri Rajat Kumar Kureel, JCIT, ld. Sr. DR For the Respondent/ assessee: Shri Miraj D.Shah, FCA, ld. AR ORDER Shri S. S. Viswanethra Ravi, JM This appeal of the revenue arises out of the order of the CIT(A)-I, Kolkata in Appeal No. 390/CIT(A)-1 2(4)2012-13 dated 03-05-2013 for the assessment year 2010-11 against the order of assessment framed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. In this appeal, the revenue has raised the following grounds of appeal:- 1. That on the facts and the circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as relied on by the ld.AR of the assessee before the CIT(A) held that the loss incurred from purchase and sale of shares on proprietary account was eligible for set off against such brokerage income. The AO is accordingly directed to allow such set off. 7. As aggrieved by the order of the CIT(A), now the revenue is in appeal before us and contended that the CIT(A) held in deleting the addition by disallowing the speculation loss against business income and relied on the order of the AO. 8. In reply, the ld.AR reiterated the same submissions as made before the CIT(A) and relied on the impugned order of the CIT(A) in disallowing the addition made by the AO. 9. Heard the rival submissions and perused the material available on record. As rightly pointed out by the Ld AR of the assessee that the question before us is as to whether for the purpose of Explanation to S. 73 is applicable for purchase and sale of shares on assessee s account and on clients account should be considered as one and individual business. The Hon ble Jurisdictional Calcutta High Court decided the same issue in the case of Sandune Trade Pvt. Ltd supra. The relevant portion of finding is reproduced here un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear under consideration, but, however, the AO denied the same on the ground that the income of assessee consists of many other heads of income and there was no gain in trading and allowed carry forward next year. We find that the Hon ble Jurisdictional Calcutta High Court as held in the case of Sandune Trade Pvt. Ltd supra that the brokerage income was earned and the activity of dealing in shares in the own account was to be treated as share trading business. The entire activity has to be treated as one. Respectfully following the same, we find no infirmity in the impugned order of the CIT(A) and we uphold the same. Accordingly, the ground nos. 1 and 2 of the revenue are dismissed. 12. Ground no-3 involving the disallowance of expenses of ₹ 4,32,999/- being penal in nature by the AO. Before the CIT-A, the assessee contended that the rules framed by the National Stock Exchange can not be equated with any Statutory rules and regulations, considering the same, the CIT-A deleted said addition. 13. Before us, the Ld.DR relied on the order of AO and Ld.AR reiterated the same submissions as advanced before the CIT-A. 14. Heard both representatives and perused the relevant m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of s. 37(1) of the Act. Rule. 1(1) of the NSE Ltd clearly brings out that it has been constituted as a limited company under the Companies Act, 1956, and it is subject to the provisions of Securities Contract (Regulations) Act, 1956 and Securities Exchange Board of India Act, 1992. The powers of the Board of NSE Ltd. to make bye-laws, rules and regulations is subject to the directives under these enactments and also the trading regulations prescribed by RBI from time to time. The appointments to the board of directors of the NSE Ltd has to be done as per the provisions of articles of association of NSE Ltd. The Board is having power for penalizing any disobedience or contravention of its rules, bye-laws and regulations by its member. No doubt, the board of directors of NSE has therein nominees of SEBI, but, in our opinion, this by itself would not make NSE a statutory body on par with SEBI. Members of NSE Ltd are bound through the articles of association to abide by the rules, regulations and bye-laws of the NSE Ltd. Nevertheless, such rules, regulations and bye-laws can be considered as regulations for controlling the internal inter se obligations and rights of the members and N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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