TMI Blog2021 (9) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... und no. 1 raised by the revenue stands dismissed. Characterization of loss - Treating the loss/income incurred by the assessee for trading in shares, Future and Options and derivatives as business loss as against the finding of the Ld. AO treating the same as speculation loss - HELD THAT:- We find this issue has come up before this tribunal in assessee s own case for the A.Y 2012-13 [ 2021 (2) TMI 1204 - ITAT KOLKATA] wherein the Tribunal after placing reliance on the judgment of the Hon ble Jurisdictional High Court in assessee s own case for the A.Y 2005-06 by order dated 12-03-2014, has held that the income from derivatives, Future and Options and Share trading carried out on recognised Stock Exchange is not in the nature of speculation and it is a business income. Addition u/s 2(24)(x) r.w.s. 36(1)(va) in respect of employees contribution towards PF/ ESI - delay on payment of employees contribution to PF as prescribed by the respective Act - HELD THAT:- As alleged sum was duly deposited with the respective authority before the due date of filing of return of income for the A.Y 2011-12 prescribed u/s. 139(1) of the Act. We find that the case of the assessee is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Apportioned expenditure (Rs.)(Establishment and other expenditure/Interest) Income (Loss) Sale of shares 34,69,82,039 1,22,62,050 3,93,41,281 (2,70,79,231) Derivative loss 2,62,66,074 2,62,66,074 29,78,082 (2,92,44,156) Expenditur e relatable to earning non speculative income -- -- 30,11,853 -- 2.1. The Ld. AO also observed that contribution towards Provident Fund at ₹ 2,52,972/- was deposited beyond the due date as prescribed in the Act regulating Provident Fund and accordingly, disallowed the same. Total income assessed at ₹ 4,61,94,780/- after making the additions referred hereinabove. Book Profit u/s. 115JB of the Act assessed at ₹ 88,84,259/-. 3. Aggrieved, the assessee preferred an appeal before the ld. CIT(A) and partly succeeded. 4. Now, the revenue is in appeal before the Tribunal raising the following g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgment of the Hon ble Jurisdictional High Court at Calcutta in the case of ACIT vs. Vijay Shree Ltd., in ITA No. 245 of 2011, the assessee was eligible for deduction of this amount and the Ld. CIT(A) has rightly deleted the disallowance. 7. We have heard the rival contentions and perused the records placed before us and carefully gone through the decision as referred and relied on by the ld. Counsel for the assessee. Through ground nos. 1 2 the revenue has raised these two issues, both relating to the income earned from trading in Shares, Future and Options and derivatives. In the financial statement, the assessee claimed to have been incurred loss from derivatives trading of ₹ 2,62,66,074/- and profit from Share Trading and Future and Options at ₹ 1,22,62,050/-. The Ld. AO firstly re-calculated the loss by apportioning the expenditure incurred during the year, computing loss at ₹ 5,63,23,387/- and further, treated the alleged loss from trading of Shares, Future and Options and derivatives as speculative in nature, not liable to be set off from the other business income. 7.1. We observe that as regards the apportionment of expenditure incurred dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdictional High Court in assessee s own case for the A.Y 2005-06 by order dated 12-03-2014, has held that the income from derivatives, Future and Options and Share trading carried out on recognised Stock Exchange is not in the nature of speculation and it is a business income. The Tribunal vide its order dated 24-02-2021 in ITA No. 346/Kol/2017 observed as follows:-- It is noted that assessee is engaged in the business of share trading and assessee is also functions as a broker of securities and is a registered stock broker (stock exchanges i.e. NSE, BSE forward exchange etc.). The assessee admits that it is involved in the purchase and sale of shares securities of other companies on self account where the actual delivery is taken and given from which gross income has been shown at ₹ 3,15,992/-. It is noted that the assessee is also engaged in derivative transaction [wherein the actual delivery is not taken or given] and it incurred gross loss from derivative transaction at ₹ 37,48,335/-. The assessee has admitted to have earned gross income on brokerage at ₹ 1,52,68,296/-. . The assessee computed the gross income from the three businesses being compos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) a contract in respect of raw materials or merchandise entered into by a person in the course of his manufacturing or merchanting business to guard against loss through future price fluctuations in respect of his contracts for actual delivery of goods manufactured by him or merchandise sold by him; 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 J 956) carried out in a recognised stock exchange; [or] (e) an eligible transaction in respect of trading in commodity derivatives carried out in a [recognised association, which is chargeable to commodities transaction tax under Chapter VII of the Finance Act, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to have provided otherwise. In that case the irresistible conclusion is that the assessee is entitled to set off such loss arising out of deemed business against the income arising out of business proper. 8.1. On going through the above decision of this Tribunal, we find that the issue raised in the ground no. 2 of instant appeal is same and above stated decision of the Tribunal is squarely applicable on the issue raised before us in ground no.2. Ld. DR failed to controvert this fact and could not place any binding precedence in its favour. We, therefore, respectfully following the decision of this Tribunal in assessee s own case for the AY 2012- 13, are of the considered view, the income from Share Trading in Future Options and Derivatives earned by the assessee during the year under consideration has been rightly claimed as business income/loss. We, thus, find no infirmity in the finding of the Ld. CIT(A) on this issue. Accordingly, ground no. 2 raised by the revenue stands dismissed. 9. Through ground no. 3 the Revenue has challenged the finding of the Ld. CIT(A) deleting the addition of ₹ 2,55,972/- made by the ld. AO in view of the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the deletion was justified. Being dissatisfied, the Revenue has come up with the present appeal. After hearing Mr. Sinha, learned advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., we find that the Supreme Court in the aforesaid case has held that the amendment to the second proviso to the Sec 43(B) of the Income Tax Act, as introduced by Finance Act, 2003, was curative in nature and is required to be applied retrospectively with effect from 1st April, 1 1988. Such being the position, the deletion of the amount paid by the Employees' Contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act. We, therefore, find that no substantial question of law is involved in this appeal and consequently, we dismiss this appeal. Urgent xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities. In the light of the aforesaid discussion we do not accept the Ld. CIT(A)'s stand denying the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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