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TMI Blog2014 (1) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... e definition of "stock exchange" as given in the Securities Contracts (Regulation) Act - The AO is then also required to verify that the "Security" as mentioned in the contract note by the share-broker falls within the definition of "derivative" or "securities" as defined under the Act - the AO is satisfied that the transaction of those shares/securities/derivatives is within the parameters – Decided in favour of Revenue. - IT Appeal No. 2751 (Ahd.) of 2012 - - - Dated:- 17-5-2013 - MUKUL KR. SHRAWAT AND A. MOHAN ALANKAMONY, JJ. For the Appellant : D.K. Singh. For the Respondent : Mrs. Arti N. Shah. ORDER:- PER : Mukul Kr. Shrawat This is an appeal filed by the Revenue arising from the order of the ld. CIT(A)-IV, Baro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. On the other hand, the assessee had claimed to set off the said loss against the normal business income. The total loss which was disallowed by the AO was to the tune of Rs.10,08,407/-. The matter was carried before the first appellate authority. 3. Ld. CIT(A) has taken a view that the share transactions were carried out in recognize stock exchange and that the transaction was eligible for in respect of securities as defined in section 43(5)(d) of the Act as also Securities Contracts (Regulation) Act, section 2(ac) of the said Act. Relevant paragraph of ld. CIT(A) is reproduced hereunder:- "4.3. The assessment order u/s. 143(3) of the IT Act of the AO as well as the above submission of the appellant has been considered. In my op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m a share-broker the assessee had made the claim. A very simple method has been evolved by the assessee to claim loss of shares so as to adjust the loss against the normal business income although there was no specific loss. Such accounts as furnished by the share-broker cannot be said to be reliable one because the so-called entries made is not subject to verification. If this method of claim of loss is allowed by the Tribunal, then on the same lines hundreds of other identical cases ought to be allowed. 5. From the side of the respondent-assessee, ld.AR Mrs. Arti N Shah has supported the view taken by ld. CIT(A) and vehemently argued that an exception is prescribed in proviso (d) of section 43(5) of IT Act, therefore the securities bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Definitions. 2. In this Act, unless the context otherwise requires,-- .. (ac) "derivative" includes - (A) a security derived form a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security;" 6.2 Further, there is a definition provided in respect of recognized "stock exchange" means, quote (j) "stock exchange" means - (a) any body of individuals, whether incorporated or not, constituted before corporatisation and demutualisation under sections 4A and 4B, or (b) a body corporate incorporated under the Companies Act, 1956 (1 of 1956) whether under a scheme of corporatisation and demutualisation or otherwise. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act note by the share-broker falls within the definition of "derivative" or "securities" as defined under the said Act, reproduced supra. Thereafter the A.O. is advised to also look into the fact about the settlement of the impugned loss whether by any adjustment entry or by actual payment by the assessee to the said broker. If the AO is satisfied that the transaction of those shares/securities/derivatives is within the parameters as per the case laws cited, then he is expected to follow these case laws and decide the issue according to law. With these directions, we hereby allow the ground of the Revenue. 7. In the result, the appeal of the Revenue may be treated as allowed but for statistical purposes. - - TaxTMI - TMITax - Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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