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TMI Blog2009 (6) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... ions in terms of definition of such transaction in section 43(5) and amendment by the Finance Act, 2005 had only clarified the position. Thus the amended provisions were applicable to the assessment year 2004-05. Accordingly he disallowed the claim of the assessee. CIT(A) agreed with the submission of the assessee that F O transactions were also without delivery and therefore such transactions were speculative in nature. CIT(A) also agreed that amended provisions of section 43(5)( d ) had only prospective application from assessment year 2006-07. HELD THAT:- We find that the same issue has already been considered by the Jaipur Bench of the Tribunal in case of P.S. Kapur v. Asstt. CIT.[ 2008 (7) TMI 463 - ITAT JAIPUR-A] , The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the circumstances of the case CIT(A) was not justified in directing the Assessing Officer to allow set off of speculation loss, jobbing loss and brought forward speculation loss against the profit of future and option (F O) income. 2. Briefly stated the facts of the case are that the assessee for the relevant year had earned income of Rs. 1,22,35,641 from F O transactions. The assessee also had share trading speculation loss of Rs. 7,84,941 and jobbing loss of Rs. 2,10,000 for the year and brought forward speculation loss of Rs. 6,91,170. The assessee had set off the speculation loss of the current year as well as brought forward speculation against the income from F O transactions treating the latter as speculative income. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction. It was also submitted that provisions of section 43(5)( d ) introduced by the Finance Act 2005 had retrospective application as the same were only clarificatory in nature. Reliance was placed on the decision of Mumbai Bench of the Tribunal in case of Dy. CIT v. Sski Investors Services (P.) Ltd. [2008] 113 TTJ (Mum.) 511. 3.1 The Learned AR of the assessee on the other hand strongly supported the order of CIT(A). It was argued that transactions undertaken by the assessee only were only in future and not in options. In case of future transaction, there is contract for purchase or sales of shares at a future date and profit/loss is computed on daily basis and final settlement is made on last Thursday of a particular month wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommodity or scrips." 4.1 The Finance Act, 2005 inserted clause ( d ) in section 43(5) as per which transactions in respect of trading in derivative were deemed to be not speculative transaction. The said sub-clause is reproduced below as ready reference : "( 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 exchange; shall not be deemed to be a speculative transaction; Explanation - For the purposes of this clause, the expressions ( i )"eligible transaction" means any transaction, ( A )carried out electronically on screen-based systems through a stock broker or sub-broker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these can be considered as non-speculative in view of the provisions of clause ( d ) of section 43(5) inserted with effect from 1-4-2006 which deems derivative transactions as non speculative. In other words, it is required to be considered whether the provisions of clause ( d ) of section 43(5) are clarificative in nature and have retrospective application. 4.3 We find that the same issue has already been considered by the Jaipur Bench of the Tribunal in case of P.S. Kapur v. Asstt. CIT [2009] 29 SOT 587. The Tribunal noted that in order that a transaction be speculative within the meaning of the definition in section 43(5), the following three ingredients should be satisfied : ( a )It should be transaction in purchase/sale of co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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