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TMI Blog2010 (5) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... rmacy of Parliament over CBDT Notifications - Held that:- where recognition to stock Exchange was given from 25.01.2006 and transaction in future segment as normal business income from A/Y 2006-07, it was concluded that income from all transaction during P/Y 2005-2006 shall be deemed to be non speculative. X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Assessing Officer asked the assessee to file details of trading in futures segment and the resultant profit/loss from 01/4/2005 to 25/1/2006 and from 25/1/2006 to 31/3/2006. From the details submitted, it was noted that the assessee incurred loss of Rs.37,49,743/- on share trading in future segment upto 25/1/2006. The Assessing Officer treated the amount of Rs.37,49,743/- as speculation business loss. The speculation loss could not be allowed to be set off against the share trading in cash segment being non-speculation business. The Assessing Officer, therefore, did not allow the set off of speculation loss against the business income. 3. Before the ld. CIT(A), it was submitted that after the amendment of Income Tax Act by Finance Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivates will be business transactions. He placed reliance on the decision of I.T.A.T. in the case of G.K.Anand Bros. Buildwell (P) Ltd. v. ITO 34 SOT 439 wherein on identical facts, it had been held that provisions of clause (d) of sec. 43(5) were applicable for Assessment Year 2006-07 and, therefore, the profit or loss from derivate tradings will not be speculative profit or loss. Therefore, the same will be eligible to be set off against the business income carried out by the assessee by purchase and sale of shares on delivery basis. 5. On the other hand, ld. Sr. D.R. submitted that Bombay Stock Exchange and National Stock Exchange were recognized by C.B.D.T. w.e.f. 25/1/2006 and, therefore, the transactions carried on these exchanges w.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit of sec. 43(5)(d) but since the co-ordinate Bench had decided that the law is applicable from Assessment Year 2006-07 onwards, respectfully following the aforesaid decision, it is held that the transactions in derivatives carried out in previous year relevant to Assessment Year 2006-07, will be eligible for the benefit of sec. 43(5)(d) of the Act. Accordingly, loss incurred on derivative transactions will be liable to be set off against the profit earned in purchase and sale of shares on delivery basis. Accordingly, we decide the issue in favour of the assessee. 7. Since we have held that the transactions in derivatives will be treated as business income, no expenditure can be allocated towards speculative business. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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