9911796707
TMI Blog2012 (12) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... ered into by the assessee before 29th December 2005 covered under u/s 43(5)(d) – CBDT notified on 25th January 2006 regarding exclusion of derivative transaction from Sec 43(5) - Held that:- Following the decision in case of Claris Lifesciences (2008 (8) TMI 579 - GUJARAT HIGH COURT) once the approval is granted in the relevant previous year, and in the absence of anything indicated to the contrary, the approval has to be taken as effective from the beginning of the relevant year. Hence the derivate transactions, entered into by the assessee at the recognized stock exchanges even prior to the date of notification in the relevant previous year, are to be treated as covered by the exclusion clause set out in Sec. 43(5)(d). Issue decides in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45 4. Under the facts and in law, the learned CIT(A) has erred in confirming the disallowance of the loss on derivatives transactions of Rs. 1,09,745 by treating the same as speculation loss. 2. The assessee is a proprietor of two concerns namely M/s. Ashwin Co., and M/s. Art Craft International. It was noticed by the Assessing Officer that in M/s. Ashwin Co., in which the assessee was carrying on business of manufacturing and trading of gift articles, no business activity was carried out since last four to five years and the net profit declared from the said concern amounting to Rs. 15,958, was out of gross commission income of Rs. 2,83,316. He also noticed that in the other concern, namely M/s. Art Craft International, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed the addition by rejecting the addition evidence sought to be filed by the assessee. The assessee is aggrieved and is in further appeal raising the aforementioned grounds. 7. Before us, the learned Counsel for the assessee filed addition evidence in the shape of two documents i.e., (i) ledger account of the said party and (ii) bank statement of the assessee. It is a case of the learned Counsel for the assessee that the said amount has duly been paid by the assessee by way of two account payee cheques one of Rs. 10,000, on 26th December 2007, and the another one is of Rs. 1,90,000 on 11th December 2010. Thus, it was submitted by the learned Counsel for the assessee that addition is not justified under section 41(1) of the Act as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts on the ground that the assessee did not maintain complete and proper vouchers. He submitted that the disallowance made by the Assessing Officer is to the tune of 20% which may be reduced to 10%. 11. On the other hand, the learned Departmental Representative submitted that the disallowance has rightly been made by the Assessing Officer and the learned Commissioner (Appeals) has rightly sustained the same and, therefore, this ground of appeal should be dismissed. 12. We have heard the rival contentions in the light of material placed before us. After hearing both the parties and after considering their submissions and the smallness of the matter, we restrict the disallowance to 10% of the gross amount and the direct the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the stock exchanges, on which the impugned transactions were carried out , were duly notified on 25th January 2006, and that in accordance with the views of the co-ordinate bench in the case of Anand Buildwell (supra), as also with the views of Hon ble Gujarat High Court in the case of Claris Lifesciennces (supra), once the approval is granted in the relevant previous year, and in the absence of anything indicated to the contrary, the approval has to be taken as effective from the beginning of the relevant year. The issue is thus covered, in favour of the line of reasoning adopted by the assessee, by decision of the coordinate bench in the case of Anand Brothers (supra) and by Hon ble Gujarat High Court s judgment in the case of Claris ..... X X X X Extracts X X X X X X X X Extracts X X X X
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