Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (10) TMI 842 - ITAT HYDERABAD

2016 (10) TMI 842 - ITAT HYDERABAD - TMI - Loss from trading in commodities - whether is a speculative transaction within the meaning of Explanation (2) to Section 28 r.w.s. 43(5)(d)? - Held that:- As seen from the transactions and from the provisions of the Act, we are of the opinion that the transactions involved are certainly speculative in nature as per the mandate of Section 43(5). Since nothing was brought on record that the said transactions do not come within the exceptions provided in t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

trading in stock futures is also from the speculative transactions. Therefore, the net loss of ₹ 13,57,130/- only can be considered as loss from the speculative transactions. Therefore, we modify the orders of the AO and CIT(A) to the extent of computation of loss. AO is directed to treat only an amount of ₹ 13,57,130/- as speculative loss and the balance loss claimed by assessee should be treated as business loss. AO is directed to modify the orders accordingly. - I.T.A. No. 327/HYD .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f business. It is a fact that there are 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 ₹ 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g order. Moreso, contents of Written arguments is not discussed by C.I.T. appeals . 2. Briefly stated assessee, engaged in the business of manufacture and sale of gold ornaments, filed return of loss admitting ₹ 17,18,882/-. In the course of assessment proceedings, the Assessing Officer (AO) noticed that assessee has claimed loss of ₹ 13,57,130/- from commodity and share trading, the loss of which is worked out as under: Rs. i. Loss from trading in commodities 18,16,952 ii. Less: Gai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

culative transactions carried on by the assessee are of such a nature to constitute a business, the business (hereinafter referred to as speculation business) shall be deemed to be distinct and separate from any other business. Sec. 43(5) defines speculative transaction 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, th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

which derives its value from the prices or index of prices of underlying securities. Since the commodities like gold and silver are not securities within the meaning of sec.2(ac), therefore, the saving clause provided under clause (d) of Sec. 43(5) shall not apply to the assessee . 3.1. He accordingly considered an amount of ₹ 18,16,952/- as speculative loss. Before the Ld.CIT(A), it was contended that assessee s transactions are to be considered as separate business and therefore, the sa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of manufacturing and sale of gold ornaments disclosed loss return of income after claiming loss from commodity and share trading activity. On verification, it is noticed that the appellant profits is of ₹ 3,61,000/- from gold and silver business. During the assessment year, there is loss from trading in commodities of ₹ 18,16,952/- and gain on trading in stock futures is of ₹ 4,59,022 thereby the net loss arrived is of ₹ 13,57,130/-. The Assessing Officer mainly disallowe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessing Officer while doing so disallowed the speculation loss of ₹ 18,16,952/- instead of loss claimed by the appellant of ₹ 13,57,130/-. Hence, the profit from business income is of ₹ 3,61,752/- to be taken as total income in place of ₹ 98,070/- as arrived by the Assessing Officer . 4. Ld. Counsel placed on record a Paper Book containing set of transactions undertaken by assessee in stock exchange through brokers in commodities market as well as share market. It was his .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ilver and in share market, most of them are day-transactions. Provisions of Section 43(5) with reference to speculative transaction are as under: Sec. 43…………………………… (5) "speculative transaction" means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ks 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 excha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

broker or such other intermediary registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) and the rules, regulations or bye-laws made or directions issued under those Acts or by banks or mutual funds on a recognised stock exchange; and (B) which is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

such conditions as may be prescribed and notified7 by the Central Government for this purpose; Explanation 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 recognise .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version