TaxTMI 
TaxTMI 
2022 (5) TMI 682
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....3(3) of the Act on 30.12.2016. The grounds raised by the assessee read as under: 1. The order of the Commissioner of Income Tax (Appeals) is opposed to law and the facts and circumstances of the case. 2. The Commissioner (Appeals) erred in not appreciating the oral and written submissions and the contents of the paper book filed before him and dismissing the appeal. 3. The Commissioner (Appeals) erred in sustaining the action Of the assessing officer in treating loss of Rs.45,05,705/- from trading in transactions in shares and securities derivatives (Futures & Options) through Geojit BNP Paribas Service Ltd., an intermediary attached to National Stock Exchange (a recognized stock exchange for trading equity share ....
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....oper business because derivatives were treated differently within meaning of Explanation to section 73(4) and not at par with shares. 8. The appellant submits in his case Explanation to Section 73 is not applicable for the reason the income from principal business is from Shiva Textiles (Rs.82,23,449) and Angayarkanni investments (Rs.1,38,849/-) totaling Rs.83,68,298/- against loss of Rs.45,11,108/- from derivative trading; Explanation to Section 73 is applicable only in a case where the principal business of the assessee is purchase and sale of shares. 9. Without prejudice to the above contentions the appellant submits that both the Commissioner of Income Tax (Appeals) as well as the assessing officer failed to note that ....
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....s. 3. The Ld. AR submitted that the exception as stated in Explanation-1 to Sec.43(5)(d) was applicable and reliance on the provisions of Sec. 73 was misconceived. The Ld. Sr. DR submitted that the provisions of Sec.73 were applicable to the facts of the case as rightly held by Ld. CIT(A) in the impugned order. Having heard rival submissions, our adjudication would be as under. Assessment Proceedings 4.1 The assessee being resident individual is stated to be engaged in Textile Business under proprietary concern namely M/s Shiva Textile and share-broking business under proprietary concern namely Angayarkanni Investments. The assessee carried out shares & securities derivative trading through stock broker M/s Geojit BNP financial Ser....
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....i.e., Rs.45.05 Lacs was held to be speculative business loss. Appellate Proceedings 5. Before Ld. CIT(A), the assessee reiterated that the case would fall under Sec.43(5)(d) & (e) and the transactions were eligible transactions which were not to be considered as speculative in nature. It was also submitted that similar issue in AY 2013-14 was held in assessee's favor by the learned first appellate authority. However, Ld. CIT(A) upheld the action of Ld. AO. This decision of Hon'ble Delhi High Court in DLF Commercial Developers Ltd. (supra) was held to be applicable. The favorable decision of Hon'ble Calcutta High Court in the case of Asian Financial Services Ltd. V/s CIT (70 Taxmann.com 9) as relied upon by assessee was not to be followed....
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....f clause (5) of section 43 define 'speculative transaction' to mean a transaction in which a contract for the purchase or sale of any commodity including stocks and shares is settled otherwise than by the actual delivery or transfer of the commodity or scrips. The proviso to section 43(5) lists out certain transactions which are not deemed to be speculative transactions. Systemic and technological changes introduced by SEBI have resulted in sufficient transparency in the stock markets and have to a large extent curbed the scope for generating fictitious losses through artificial transactions or shifting of incidence of loss from one person to another. The screen based computerized trading provides for audit trail. In the wa....