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TMI Blog2012 (11) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Respondent. ORDER A.K. Garodia, Accountant Member - This is revenue's appeal and the cross objection is filed by the assessee which are directed against the order of Ld. CIT(A) IV, Surat dated 12.05.2009 for the assessment year 2006-07. 2. First, we take up the revenue's appeal. The grounds raised by the revenue are as under: "(1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) IV, Surat has erred in allowing set off of speculative loss on account of commodities trading of Rs. 91,13,122/- against the business income of Rs. 1,23,60,835/-. (2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) IV, Surat ought to have upheld the order of the A.O. (3) It is, therefore, prayed that the order of the Ld. CIT(A) IV, Surat may be set aside and that of the A.O. restored." 3. Brief facts till the assessment stage are noted by Ld. CIT(A) on pages 1, 2 3 of his order, which are reproduced below: "The brief facts of the case are that for the year under consideration assessee earned profit of Rs. 1,41,80,518/- on account of derivative trading of shares. So far as the commodity trading is concerned, assessee inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t stock exchanges in India for derivative trading. He stated that said notification is effective from 01.04.06 and considered the amendment made as retrospective being clarificatory in nature. He stated that where an amendment is made from T' April, it is usually understood that it is applicable from the assessment year starting from 1st April. He placed reliance on the decision in case of CIT v. Hongkong Ocean Shipping - 238 ITR 955 (Mad.). He made various other contentions disapproved the assessee's contention to treat F 0 income before 25.01.06 as speculative income and considered the loss in commodity trading as speculative loss and did not allow the set-off accordingly, addition of Rs. 91,13,122/- was made to the total income of the assessee on account of loss on commodity transactions." 4. Being aggrieved, the assessee carried the matter in appeal before Ld. CIT(A) who has decided this issue in favour of the assessee and now, the revenue is in appeal before us. 5. It was submitted by the Ld. D.R. that the tribunal decision rendered in the case of Asstt. CIT v. Hiren Jaswantrai Shah [2011] 46 SOT 276 supports the case of the revenue. He submitted a copy of this Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exchange is notified, the same should be considered as approved notified stock exchange for the purpose of Section 43(5) w.e.f. 01.04.2005. 7. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the judgements cited by both the sides. We find that the relevant amendment being insertion of clause (d) in sub-section (5) of Section 43 of the Act is w.e.f. 01.04.2006. The same is reproduced below for the sake of ready reference:- "43(5)(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 recognized stock exchange shall not be deemed to be a speculative transaction." 8. From the above provision of clause (d) of sub-section (5) of Section 43, we find that derivative transaction carried out in a recognized stock exchange is not to be considered as speculative transaction. Hence, this is very important to find out as to whether the derivative transaction in question was carried out in a recognized stock exchange or not. As per the notification No. 89 dated 25.01.2006, two s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2009] 121 ITD 498 (Kol.). Otherwise also, in view of this fact that two stock exchange are subsequently notified as on 22.05.2009 i.e. MCX Stock Exchange and on 25.02.2011 i.e. United Stock Exchange of India Ltd. It cannot be said that all these notifications are retrospective and are applicable w.e.f. 01.04.2005. Under this factual position, we are of the considered opinion that we are bound to follow the earlier Tribunal decision rendered in the case of Tejas K. Shah (supra) and there is no requirement to refer the matter to Hon'ble President, ITAT for constitution of a Special bench because the contradictory decision in the case of Hiren Jaswantrai Shah (supra) is not of any precedence value because of this reason that it is without considering the earlier Tribunal decision rendered in the case of Tejas K. Shah (supra). We therefore, decide this issue in favour of the assessee by respectfully following the Tribunal decision rendered in the case of Tejas K. Shah (supra). 9. In the result, appeal of the revenue is dismissed. 10. Now, we take up the C.O. filed by the assessee. The grounds raised in the C.O. are as under: "1. On the facts and in circumstances of the case as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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