TMI Blog2017 (7) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... ening is sought to be done after the expiry of four years from the end of the relevant assessment year. In other words, the requirement in the first proviso to section 147 of the Act being a failure on the part of the assessee ―to disclose fully and truly all material facts‖, it does not apply where the initial return has been processed under section 143(1) of the Act. In view of this we reverse the finding of the Ld. CIT appeal in holding that reopening of the proceeding is invalid. In the result ground No. 1 of the appeal of the revenue is allowed. Disallowing brought forward speculative loss - Held that:- If the transactions are carried out electronically at recognised stock exchange in shares and securities then the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while the AO reopened the case with the application of mind and following the due procedure provided in the Act. 2. On the fact and circumstances of the case the ld CIT(A) erred in law as well as on merits in deleting the addition of ₹ 5484520/- made by AO by disallowing brought forward speculative loss. 3. To state the facts in nutshell, assessee is an individual earning income from salary, house property, business and other sources. He filed his return of income on 31/10/2006 showing income of ₹ 3584069/ and agricultural income of ₹ 1005010/ . The return was processed under section 143 (1) of the Income Tax Act on 31/01/2008. Subsequently notice under section 148 of the Income Tax Act was issued on 13/01/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (A) vide its order dated 29/09/2010 held that reopening is devoid of essential requisite as per the provisions of section 147 of the income tax act and therefore held to be invalid. On allowability of the set off of speculative loss against the business income he held that though the loss for the assessment year 2005 06 was assessed as speculation loss the same is eligible for set of against the business income for assessment year 2006 07. Therefore on the merit also he allowed the appeal of the assessee. Revenue being aggrieved by the order of the Ld. CIT- A has preferred an appeal before us raising effectively two grounds of appeal. 4. The 1st ground of appeal of the revenue is that the Ld. CIT A erred in holding reopening of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to an assessee, it is not an ‖assessment‖ in the strict sense of the term for the purposes of section 147 of the Act. In such event, there is no occasion for the Assessing Officer to form an opinion after examining the documents enclosed with the return whether in the form of balance-sheet, audited accounts, tax audit report, etc. The first proviso to section 147 of the Act applies only (a) where the initial assessment is under section 143(3) of the Act and (b) where such reopening is sought to be done after the expiry of four years from the end of the relevant assessment year. In other words, the requirement in the first proviso to section 147 of the Act being a failure on the part of the assessee ―to disclose fully a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance act 2005 w.e.f. forced April 2006 but it is retrospective in application by necessary implication. Therefore it was held therein that the loss claimed by the assessee in derivative transaction is therefore allowable as business loss as the same is not covered by the provisions of section 43 (5) of the income tax act aas speculation loss. 9. The Ld. departmental representative submitted that the assessee has himself stated in the previous year that the loss arising to the assessee is in speculation business. Therefore the claim made by the assessee during the year considering the same speculation loss which was determined in last assessment year u/s 143 (3) of the income tax act as business income is incorrect. He further submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er:- ( 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 bye-laws 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 client indicating in the contract note, the unique client identity number allotted under the Act, rules regulations or bye-laws referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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