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TMI Blog2012 (9) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... s by the Assessing Officer and thereby disallowing the set-off as business loss. The assessee is an individual and is engaged in the business of derivative trading in commodity and investment in shares. During the year under appeal, the assessee had shown business loss of Rs. 77,63,237 from derivative trading, short term capital gains of Rs. 92,08,889, and long term capital loss of Rs. 32,46,619. Besides this, the assessee had income from other sources at Rs. 3,83,383. In the course of assessment proceedings, the Assessing Officer observed that the assessee has incurred loss in derivative trading in commodity of Rs. 77,63,237, as normal business loss and has sought set-off against short term capital gains and income from other sources. He f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion on derivative trading in commodity in MCX were not recognized in the stock exchange in accordance with the provisions of section 43(5) r/w Rule-6DDA, 6DDB of the I.T. Rules, and Notification no.SQ 89(E). He further held that MCX in which the assessee was carrying on its derivative trading has been notified as recognized Stock Exchange for the purpose of section 43(5) only by Notification no.46/2009 dated 22nd May 2009, with prospective effect. Therefore, the assessee's derivative trading in MCX has a speculation business in the assessment year 2007-08. 4. The assessee, aggrieved by the stand so taken by the Assessing Officer, went in appeal before the first appellate authority, wherein, the assessee contended that the derivative trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the assessee's ground was allowed. Aggrieved, the Revenue is in appeal before the Tribunal. 6. Before us, the learned Departmental Representative relied on the order passed by the Assessing Officer and submitted that the trading in MCX have been notified as recognized Stock Exchange for the purpose of section 43(5) only from 22nd May 2009, with prospective effect and the same will not be applicable in the assessee's case which is for the assessment year 2007-08. He submitted that even though the amendment in section has come from assessment year 2006-07, however, the Board has notified the MCX only in the year 2009, therefore, the derivative trading in MCX cannot be held to be non-speculative business income in this year (i.e., A.Y. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradeep Kumar Harlalka v. ACIT 47 SOT 204; 4. ACIT v. Parimal D. Nathwani 9 taxmann.com 284 5. G.K. Anand Bros Buildwell P. Ltd. v. ITO 34 SOT 439 (Del.) 8. We have carefully considered the rival contentions of the parties, perused the findings of the Commissioner (Appeals) as well as of the Assessing Officer and the material available on record. The assessee who is carrying out derivative trading in commodity through MCX Stock Exchange has incurred a loss of Rs. 77,63,237. The Assessing Officer has treated such as a loss as speculation loss mainly on the ground that Notification number 46 of 2009, issued by the CBDT, on 22nd May 2009, recognizing MCX as recognized Stock Exchange for the purpose of section 43(5), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary recognition and consequent notification. Hence, these are purely procedural mechanism. When a rule or provision does not effect or empower any right or create an obligation but merely relates to procedural mechanism, then it is deemed to be retrospective unless such an inference is likely to lead to an absurdity. If the amendment is made in procedural mechanism, it will apply to all the proceedings pending or to be initiated. Once in the statute, it has been provided that w.e.f. 1st April 2006, an eligible transaction carried out in a recognized Stock Exchange will not be treated as speculation transaction, then simply because procedural mechanism has taken a long time to recognize the Stock Exchange, it will not lead to an inference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; The cross objector prays Rule 6DDB is only procedural in nature and hence it is deemed to be retrospective unless such inference is likely to lead to absurdity. 3. The cross objector prays that the power to notify the stock exchange is granted under the statute and hence once the stock exchange is notified the same will apply in respect of all the transactions carried out in relation to financial year relevant to assessment year 2006-07 onwards even if the notification is from a particular date." 11. After haring both the parties we find that the grounds raised in this cross objection are in support of the contention raised before the authorities below. Since we have dismissed the appeal preferred by the Revenue, the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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