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TMI Blog2016 (10) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... many series of transactions in the year and this is to be treated as business loss and not a speculation loss. The loss disallowed is Rs. 1816952/- treating it a speculation loss is against facts and law. Transactions in commodities is akin to trading in F&O derivates and as such this is to be termed as business. Even the subsequent years such a business is there. There is no provision in SEBI which prohibits us from doing this type of business and our memo. of association and articles of association also do not prohibit us for the same business. As such this is to be treated as securities. That the additions made by the I.T.O. are not proper. 2. CIT Appeals have made further additions over and above the additions made by the I.T.O. with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction as a transaction in which contract for purchase or sale of any commodity including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or the transfer of commodity or scrips. However, this rule has an exception in clause (d) which provides that an eligible transaction in respect of trading in derivatives referred to in clause (ac) of section (2) of the Securities Contracts (Regulation) Act, 1956 carried out in the recognized Stock Exchange. Sec.2(ac) of the Securities Contracts (Regulation) Act, 1956 defines a derivative as including (a) a security derived from debt instrument, share, loan, risk instrument or contractual differences or any other form of security. (b) a contract which derive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason that the commodity like gold and silver are not securities within the meaning of Section 2(ac), thereby, the saving clause provided under clause (d) of section 43(5) shall not apply to the appellant. During the course of appeal proceedings also, the appellant failed to substantiate his claim of speculative loss to be allowed. Therefore, I am in agreement with the Assessing Officer and the addition made by the Assessing Officer is confirmed. But the Assessing Officer while doing so disallowed the speculation loss of Rs. 18,16,952/- instead of loss claimed by the appellant of Rs. 13,57,130/-. Hence, the profit from business income is of Rs. 3,61,752/- to be taken as total income in place of Rs. 98,070/- as arrived by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im; or (b) a contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuations; or (c) a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member; or (d) an eligible transaction in respect of trading in derivatives referred to in clause (ac) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) carried out in a recognised stock exchange; or (e) an eligible transaction in respect of trading in commodity derivatives carried out in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 2.-For the purposes of clause (e), the expressions- (i) "commodity derivative" shall have the meaning as assigned to it in Chapter VII of the Finance Act, 2013; (ii) "eligible transaction" means any transaction,- (A) carried out electronically on screen-based systems through member or an intermediary, registered under the bye-laws, rules and regulations of the recognised association for trading in commodity derivative in accordance with the provisions of the Forward Contracts (Regulation) Act, 1952 (74 of 1952) and the rules, regulations or byelaws made or directions issued under that Act on a recognised association; and (B) which is supported by a time stamped contract note issued by such member or intermediary to every clien ..... X X X X Extracts X X X X X X X X Extracts X X X X
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