2010 (1) TMI 874

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e to speculative business. He also disallowed the penalty levied by the Stock Exchange on the assessee for violation of margins. Aggrieved, the assessee carried the matter in appeal. The first appellate authority partly allowed the appeal. The Revenue files this appeal on the following grounds:- 1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in directing the AO to treat the loss on derivatives transactions as non speculation loss overlooking the fact that the Explanatory notes to the Finance Act, 2005 clearly stated that transactions in derivatives shall cease to be speculative only from the day the Stock Exchanges fulfil the conditions to be prescribed by the Central Govt. and it was only w.e.f. 25th January, 2....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nsideration of the facts and circumstances of the case and a perusal of the papers on record and the orders of the authorities below, we hold as follows. 5. Ground Nos. 1 to 3 are on the issue whether loss on derivatives transaction is a speculation loss or not and whether the provisions of section 45(5)(d) are clarificatary and hence retrospective in nature. Mr. R.R. Vora vehemently contended that sub-clause (d) to subsection (5) to section 43 introduced by the Finance Act, 2005 with effect from 1-4-2006 is clarificatory in nature and, therefore, retrospective in its operation. He relied on the decision of the Hon'ble Supreme court in the case of Allied Motors P. Ltd. vs. CIT, Delhi 224 ITR 667 (SC) and the judgment in the case of CIT vs.....