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TMI Blog2020 (3) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... s and stated that as per section 73(1) of the Act the same cannot be set off against other normal business loss. We consider that the ld. CIT(A) is not justified in treating the business loss incurred in Future Option of Derivatives as speculation loss. Therefore, following the decision of the Co-ordinate Bench [ 2019 (9) TMI 610 - ITAT AHMEDABAD] the appeal of the assessee is allowed. - ITA No. 973/Ahd/2018 - - - Dated:- 12-3-2020 - Shri Sandeep Gosain, Judicial Member And Shri Amarjit Singh, Accountant Member Revenue by: Shri Lalit P. Jain, Sr. D.R. Assessee by: Shri S.N. Divetia, A.R. ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- This assessee s appeal for A.Y. 2013-14, arises from order of the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss. The assessing officer has not accepted the explanation of the assessee stating that apart from its normal business activity the assessee company was having speculation transaction and after referring the decision of Hon ble High Court in the case of CIT vs. DLF Commercial Developer Ltd. ITA 94/2013 concluded that loss shown by the assessee was a speculation loss. Therefore, the assessing officer concluded that as per section 71(A) of the Act any loss computed in respect of speculation business carried on by the assessee shall not be set off in respect of profit and gain if any of other speculation business. 4. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee by reitera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roker note along with contract notes/invoices were submitted during the course of assessment proceedings. The assessing officer has treated the aforesaid loss as speculation loss and stated that as per section 73(1) of the Act the same cannot be set off against other normal business loss. In this regard, we have gone through the provision of section 43(5) of the Act pertaining to speculation transaction reproduced as under:- (5) 1 speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips: Provided that for the purposes of this clause- (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. ITO has adjudicated the identical issue as under:- 3.3 The substantive question in controversy is whether loss incurred in eligible transactions viz. 'derivative transactions' within the meaning of Proviso (d) to Section 43(5) of the Act not involving any purchase or sale of shares per se can be regarded as 'speculative loss' for the purposes of set off in view of Explanation to Section 73 or not? 3.4 The Co-ordinate Bench of ITAT in ITA No. 770/Ahd/2016 concerning A.Y. 2012-13 order dated 31.10.2018 has adjudicated the issue in favour of the assessee. The relevant operative para is reproduced hereunder:- 9. We have carefully considered the rival submissions and perused the respective orders of the AO and CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion thereto for the purposes of refusing loss to be set off against business income is wholly incorrect. The Hon'ble Calcutta High Court after taking note of the decision of Hon'ble Delhi High Court in DLF Commercial (supra) took a distinct stand that derivatives cannot be treated at par with shares for the purposes of Explanation to Section 73 of the Act because the legislature has treated it differently. Thus, in view of the aforesaid position enunciated by the Hon'ble High Court in Asian Financial Services (supra), we find good deal of force in the case of assessee. The claim of the assessee thus requires to be allowed on this ground alone. 9.3 In view of the resounding conclusion drawn in favour of the assessee on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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