2010 (9) TMI 905 - AT - Income Tax

Summary

Issues involved:
The only issue involved in this appeal is about the treatment of profit earned from future and option transactions, whether to be treated as speculative transaction as against business transaction treated by the assessee.

Details of the Judgment:

1. The assessee, a salaried employee, derived income from trading in future and options and claimed set off of the brought forward loss in future and options against business income of the current year. The AO treated the future option transaction as speculative based on Circular No.2 of 2006 and explanatory memorandum, allowing set off against speculation income. The assessee claimed set off of loss for the previous year against the income of the current year. The argument raised before the ld. CIT(A) included the clarificatory nature of the notification, lack of speculation transaction ingredients in future & option trade, and reference to relevant case laws. The ld. CIT(A) relied on a Tribunal decision for holding that transactions in future & options are speculative till the relevant amendment, which would not be applicable retrospectively.

2. The Tribunal upheld the decision of the ld. CIT(A) stating that there was no case for interference as the Special Bench judgment was binding. No contrary material or higher court judgment was presented to warrant a different view. Consequently, the appeal filed by the assessee was dismissed.

This judgment clarifies the treatment of profit from future and option transactions, distinguishing between speculative and business transactions based on relevant laws and precedents.