TaxTMI 
TaxTMI 
2009 (6) TMI 676
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....eculation loss, jobbing loss and brought forward speculation loss against the profit of future and option (F&O) income. 2. Briefly stated the facts of the case are that the assessee for the relevant year had earned income of Rs. 1,22,35,641 from F&O transactions. The assessee also had share trading speculation loss of Rs. 7,84,941 and jobbing loss of Rs. 2,10,000 for the year and brought forward speculation loss of Rs. 6,91,170. The assessee had set off the speculation loss of the current year as well as brought forward speculation against the income from F&O transactions treating the latter as speculative income. The assessee explained before the Assessing Officer that F&O transactions were in the nature of derivative transactions. Such....
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.... application as the same were only clarificatory in nature. Reliance was placed on the decision of Mumbai Bench of the Tribunal in case of Dy. CIT v. Sski Investors Services (P.) Ltd. [2008] 113 TTJ (Mum.) 511. 3.1 The Learned AR of the assessee on the other hand strongly supported the order of CIT(A). It was argued that transactions undertaken by the assessee only were only in future and not in options. In case of future transaction, there is contract for purchase or sales of shares at a future date and profit/loss is computed on daily basis and final settlement is made on last Thursday of a particular month without taking any delivery of shares. Therefore the future transactions were of the nature of speculative transaction in terms of....
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....ng in derivative were deemed to be not speculative transaction. The said sub-clause is reproduced below as ready reference : "(d)an eligible transaction in respect of trading in derivatives referred to in clause (ac) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) carried out in a recognised stock exchange; shall not be deemed to be a speculative transaction; Explanation - For the purposes of this clause, the expressions- (i )"eligible transaction" means any transaction,- ( A)carried out electronically on screen-based systems through a stock broker or sub-broker or such other intermediary registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) in accordance wi....
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....erivative transactions as non speculative. In other words, it is required to be considered whether the provisions of clause (d) of section 43(5) are clarificative in nature and have retrospective application. 4.3 We find that the same issue has already been considered by the Jaipur Bench of the Tribunal in case of P.S. Kapur v. Asstt. CIT [2009] 29 SOT 587. The Tribunal noted that in order that a transaction be speculative within the meaning of the definition in section 43(5), the following three ingredients should be satisfied : (a)It should be transaction in purchase/sale of commodity. Commodity would include stock and share. (b)The transaction envisages delivery/transfer. (c)The transaction is settled otherwise than by delive....