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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 ..... ng the business loss incurred in Future & Option of Derivatives of 1,71,9537- as Speculation Loss by invoking the provisions of section 73(1) of the Income Tax Act. 2. The Ld. CI(A) & Learned Assessing Officer further erred in considering the F & O transactions has not satisfied the condition of section 43(5) of the IT Act." 3. The fact in brief is that return of income declaring income of Rs. 18,75,548/- was filed on 28th Sep, 2013. The case was subject to scrutiny assessment and notice u/s. 143(2) of the act was issued on 3rd Sep, 2014. During the course of assessment, the assessing officer noticed that assessee has claimed loss of Rs. 1,71,953/- on sale of currency transaction under the head other income. The assessing officer asked t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment and appellate proceedings. The ld. counsel has referred the various contract notes pertaining to the transaction in future and option made through authorized broker and submitted that assessing officer has incorrectly made reference to the decision of Delhi High Court in the case of DLF Commercial Developer Pvt. Ltd. which was related to trading of shares whereby the assessee has shown transaction in Nifty and Currency (F&O) which is governed by section 43(5) of the Act. To support his contention, the ld. counsel has placed reliance on the decision of Co-ordinate Bench of ITAT Ahmedabad vide ITA (2019) 111 taxman.com 339 (Ahmedabad Trib.) in the case of Magic Share Trading Ltd. vs. ITO. On the other hand, ld. departmental represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by him or merchandise sold by him; or (b) a contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuations; or (c) a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member; shall not be deemed to be a speculative transaction; (d) an eligible transaction in respect of trading in derivatives referred to in clause 71[(ac)] of section 272 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) carried out in a recognised stock exchange; 73[or] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speculative loss for the purposes of set off in view of Explanation to Section 73 or not. The controversy involved in the present case is thus essentially legal in nature. 9.1 In the present appeal, the assessee seeks set off of losses arising from derivative losses as non-speculative business loss. In contrast, the Revenue has labeled the loss arising from derivative transactions as 'speculative loss' and has consequently denied set off of such losses from regular income of non-speculative nature etc. by applying Explanation to Section 73 of the Act. 9.2 We first advert to the pivotal contention on behalf of the assessee that Explanation to Section 73 of the Act cannot apply to loss arising from derivative transactions wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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