9911796707
TMI Blog2022 (5) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... unds raised by the assessee read as under: 1. The order of the Commissioner of Income Tax (Appeals) is opposed to law and the facts and circumstances of the case. 2. The Commissioner (Appeals) erred in not appreciating the oral and written submissions and the contents of the paper book filed before him and dismissing the appeal. 3. The Commissioner (Appeals) erred in sustaining the action Of the assessing officer in treating loss of Rs.45,05,705/- from trading in transactions in shares and securities derivatives (Futures & Options) through Geojit BNP Paribas Service Ltd., an intermediary attached to National Stock Exchange (a recognized stock exchange for trading equity share derivative) on the ground it is speculative in nature and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation to section 73(4) and not at par with shares. 8. The appellant submits in his case Explanation to Section 73 is not applicable for the reason the income from principal business is from Shiva Textiles (Rs.82,23,449) and Angayarkanni investments (Rs.1,38,849/-) totaling Rs.83,68,298/- against loss of Rs.45,11,108/- from derivative trading; Explanation to Section 73 is applicable only in a case where the principal business of the assessee is purchase and sale of shares. 9. Without prejudice to the above contentions the appellant submits that both the Commissioner of Income Tax (Appeals) as well as the assessing officer failed to note that the appellant being an individual the provisions of Section 73 of the Act is not applicable i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliance on the provisions of Sec. 73 was misconceived. The Ld. Sr. DR submitted that the provisions of Sec.73 were applicable to the facts of the case as rightly held by Ld. CIT(A) in the impugned order. Having heard rival submissions, our adjudication would be as under. Assessment Proceedings 4.1 The assessee being resident individual is stated to be engaged in Textile Business under proprietary concern namely M/s Shiva Textile and share-broking business under proprietary concern namely Angayarkanni Investments. The assessee carried out shares & securities derivative trading through stock broker M/s Geojit BNP financial Services Ltd. and suffered loss of Rs.45.11 Lacs which was claimed as Short-term capital loss. The Ld. AO opined tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee reiterated that the case would fall under Sec.43(5)(d) & (e) and the transactions were eligible transactions which were not to be considered as speculative in nature. It was also submitted that similar issue in AY 2013-14 was held in assessee's favor by the learned first appellate authority. However, Ld. CIT(A) upheld the action of Ld. AO. This decision of Hon'ble Delhi High Court in DLF Commercial Developers Ltd. (supra) was held to be applicable. The favorable decision of Hon'ble Calcutta High Court in the case of Asian Financial Services Ltd. V/s CIT (70 Taxmann.com 9) as relied upon by assessee was not to be followed since the Special Leave Petition of the department was admitted by Hon'ble Apex Court. Aggrieved, the assessee is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any commodity including stocks and shares is settled otherwise than by the actual delivery or transfer of the commodity or scrips. The proviso to section 43(5) lists out certain transactions which are not deemed to be speculative transactions. Systemic and technological changes introduced by SEBI have resulted in sufficient transparency in the stock markets and have to a large extent curbed the scope for generating fictitious losses through artificial transactions or shifting of incidence of loss from one person to another. The screen based computerized trading provides for audit trail. In the wake of these developments, the present distinction between speculative and non-speculative transactions, in respect of trading in derivative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted fact that the derivative transactions are eligible transactions carried out on recognized stock exchange and the same are eligible transactions which are deemed to be non-speculative in nature. This is as per amendment brought in by Sec.43(5) w.e.f. AY 2006-07 which provide that the derivative income / losses are to be deemed as non-speculative in nature. The trading in derivatives in shares could not be held to be at par with trading in shares since the legislatures has intended to treat them differently. The above case law of Hon'ble Supreme Court clearly supports the case of the assessee. Therefore, there is no hindrance for the assessee to claim the set-off of losses of impugned eligible transactions from normal business income. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
