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TMI Blog2020 (3) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal while considering the appeal of the Revenue found that the CIT(A) at the time of deciding the appeal of the assessee against the addition made by AO treating the same as speculation loss, had called for the remand report to ascertain as to whether the assessee did fulfill the condition laid down under sub-clause (d) of proviso to Sub-section (5) of Section 43 - Contract notes were also produced by the assessee before the CIT(A), amongst which the note issued by the broker M/s Arihant Capital Market Ltd. through whom the assessee had undertaken the alleged transactions in respect of trading in derivatives i.e. F O of shares was also examined in particular. The contract note clearly revealed that the transactions were supported by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 05.07.2016 passed by the Income Tax Appellate Tribunal, Jabalpur (for brevity the Tribunal ) in I.T.A.No.284/Ind/2015 relating to Assessment Year 2007-08, whereby the appeal filed by the appellant-Revenue has been dismissed. 2. This appeal was admitted on 27.11.2017 for determination of the following substantial question of law:- (i) Whether on the facts and in the circumstances of the case, learned Tribunal was correct in holding that the loss of ₹ 96,50,334/- constituted business loss and not a speculation loss? 3. The facts of the case, as are borne out from the memo of appeal, in nutshell are that the respondent-assessee derived income from the business of shares sub-brokers, trading in futures and opti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.A. No.12773/2019 that in the light of the Circular No.3/2018 dated 11.07.2018 read with amended Circular No.17/2019 dated 08.08.2019 issued by the CBDT, the present appeal is not maintainable, as the tax effect is below ₹ 1.00 Crore. However, combating the said objection, learned counsel for the Revenue submitted that though the tax effect involved in the present case is below the prescribed monetary limit for filing the appeal, but since there is Revenue audit objection, therefore, the case is covered under Para 10(c) of the aforesaid CBDT circulars and the appeal can be filed. In view of the said fact, the preliminary objection raised is noted to be rejected. 5. Learned counsel for the appellant made an extraneous effort to per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present appeal deserves to be dismissed. 8. It is noted that before the Tribunal, the Department of Revenue admitted that the addition of ₹ 96,50,334/- as speculation loss was made due to some confusion that the business loss of the earlier year was brought forward by the assessee for set off in the assessment year 2007-08 and since the provisions of Section 43(5)(d) of the Act were introduced w.e.f. 01.04.2006, therefore, the advantage of the said provision was not available to the assessee for the earlier year. It was further agreed by the Revenue that the loss from shares and futures was covered by clause (d) of proviso to subsection (5) of Section 43 of the Act and was not a speculation loss. In this view of the matter, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate authorities below erred in allowing the loss claimed by the assessee in transaction of shares F O by treating the same as general business loss, is taken up, we do not find any merit in the said argument as well. The relevant statutory provision contained in Section 43(5) of the Act which was inserted in the Act by the Finance Act, 2005 w.e.f. 1.4.2006, reads as under:- Definitions of certain terms relevant to income from profits and gains of business or profession. 43. In sections 28 to 41 and in this section, unless the context otherwise requires- *** *** *** (5) speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (d) of the proviso to sub-section (5) of Section 43 of the Act and the explanation attached to it makes it clear that if a transaction in trading of derivatives is carried out electronically on screen based system through a stock broker or sub-broker and it is supported by a time stamped contract note issued by such broker which indicates unique client identity and PAN number of the client, it shall be an eligible transaction and shall not be deemed to be a speculative transaction . 12. The learned Tribunal while considering the appeal of the Revenue found that the CIT(A) at the time of deciding the appeal of the assessee against the addition of ₹ 96,50,334/- made by the Assessing Officer treating the same as speculation lo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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