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TMI Blog2010 (2) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... riefly stated, the facts of the case are that the assessee, a resident company, deals in stock and share broking. It had filed return of income for assessment year 2004-05 on 31-10-2004 declaring a total income of Rs. 5,72,140. It also filed the trading, Profit Loss Account, Balance Sheet and other related information, tax audit report as required under section 44AB of the Income-tax Act, 1961 ( the Act ) before the Assessing Officer. During the course of assessment proceedings, the assessee was asked to furnish the basis on which share broking business was worked out. The assessee-company was also required to give details of future trading and the manner they were accounted for. In response to the same, the ld.AR of the assessee furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), after considering the definition of speculative transaction and trading in derivatives, has finally come to a favourable conclusion by accepting the contention of the assessee and has deleted the entire addition by observing that with effect from 1-4-2006, as per Finance Act, 2005, particularly clause (d) to the proviso to section 43(5) which was introduced to exclude an eligible transaction in respect of trading in derivatives referred to in clause 2(ac) of the Securities Contract (Regulation) Act, 1956, carried out in a recognized stock exchange. It has been observed by the ld. CIT(A) that this amendment was brought only to remove an ambiguity and hence is of clarificatory in nature and as such, it would have a retrospective effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 2006-07 only and hence, the impugned proviso (d) to section 43(5) cannot have a retro effect. (2.4) The learned CIT(A) failed to note the ratio laid down by the Hon ble Apex Court in the case of CIT v. Varas International (P.) Ltd. (283 ITR 484) that unless an amended provision indicates either in terms or by necessary implication that it is to have a retrospective operation, such amended provision cannot operate retrospectively. 3. We have heard the rival submissions, the available material on record and have also carefully treated through the relevant provisions of the Act and related precedents thereof. Before we venture to decide the controversial issue, we have to understand as to what exactly derivative means and what ..... X X X X Extracts X X X X X X X X Extracts X X X X
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