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TMI Blog2010 (7) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... Account and other details, the A.O. found that the assessee claimed loss of ₹ 1,63,718/- on derivative transaction, which was adjusted against the income from business by directly debiting in P/L Account. According to the A.O., as per Notification No.2 dated 25/1/2006, the derivative transaction upto 24/1/2006 is to be considered as speculation business and from 25/1/2006 to 31/3/2006 the said transaction is to be considered as business other than speculation , which the assessee did not do while drawing P/L Account. From the details filed in respect of derivative sales, the A.O. found that there was a loss of ₹ 2,22,296/- upto 24/1/2006 and there was a profit of ₹ 58,578/- from 25/1/2006 to 31/3/2006. He, therefore, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T.A.T. in the case of Shree Capital Services Ltd. vs. ACIT, reported in 318 ITR (AT)1 (Kol-SB), the Tribunal treated the loss incurred by the assessee on derivative transaction as business loss. The finding of the Tribunal in the said case is as under :- Section 43(5) defines speculative transaction which means a transaction in which a contract for the purchase or sale of any commodity including stocks and shares is periodical or ultimately settled otherwise than by the actual delivery or the transfer of commodity or scrips. Proviso below section 43(5) carves out exceptions to section 43(5). As per clause (d) of the said proviso an eligible transaction in respect of trading in derivatives referred to in the Securities Contracts (Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted legislation but cannot override the principal legislation enacted by the Parliament. It only clarifies but will not override unless statutorily so prescribed. Since there was no dispute to the fact that the transactions, in the instant case, in future and option segment were the eligible transactions carried out in a recognized stock exchange, loss in such transactions could not be deemed to be loss in the speculation business. Therefore, the loss-in-question was to be treated as a business loss and not as loss in speculation business. In view of the above and respectfully following the aforesaid decision of Tribunal in the case of G.K. Anand Bros. Buildwell (P) Ltd. (supra), we hold that the authorities below were not justified i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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