{"id":895,"date":"2009-08-28T11:05:38","date_gmt":"2009-08-28T11:05:38","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=895"},"modified":"2009-08-28T11:05:38","modified_gmt":"2009-08-28T11:05:38","slug":"shree-capital-services-vs-acit-itat-kolkota-special-bench","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/shree-capital-services-vs-acit-itat-kolkota-special-bench\/","title":{"rendered":"Shree Capital Services vs. ACIT (ITAT Kolkota Special Bench)"},"content":{"rendered":"\n\n
Click here to download the judgement (shree_capital_derivatives_speculative.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n

Futures & Options are speculative transactions u\/s 43(5). S. 43 (5)(d) is not retrospective<\/strong><\/p>\n

In respect of AY 2004-2005, the assessee suffered a loss on account of trading in futures and options<\/strong>. S. 43 (5) defines a \u201cspeculative transaction\u201d as one in which a contract for purchase and sale of any commodity, including stocks and shares, is settled otherwise than by actual delivery. Clause (d) was inserted in s. 43 (5) by the Finance Act, 2005 w.e.f 1.4.2006<\/strong> to provide that \u201can eligible transaction of trading in derivatives<\/em>\u201d shall not<\/strong> be deemed to be a speculative transaction. The Special Bench had to consider (i) whether transactions in derivatives are a \u201cspeculative transaction\u201d u\/s 43 (5) and if so (ii) whether clause (d) of s. 43 (5) is clarificatory and retrospective in nature. HELD, deciding against the assessee: <\/p>\n

(i) A \u2018derivative\u2019 is a security representing the value of the underlying stocks and shares and must be given the same treatment as that given to the stocks and shares<\/strong>. Also, s. 43 (5) uses the term \u201ccommodity\u201d in a wide sense and covers \u2018derivatives\u2019. Further, the fact that s. 43(5)(d) exempts certain derivatives from the ambit of the definition of \u2018speculative transaction\u2019 shows that they would otherwise have come within that term as otherwise the amendment would be redundant.<\/p>\n

(ii) Clause (d) of s. 43(5) cannot be held to be clarificatory<\/strong> because it does not exempt all transactions in derivatives but only the \u2018eligible transactions\u2019 on \u2018recognized stock exchanges\u2019. Rules 6DDA & 6DDB which deal with \u2018recognized stock exchanges\u2019 were inserted w.e.f. 1.7.2005. Consequently, it applies only to AY 2006-2007 & onwards. <\/p>\n

\nNote: The decisions in SSKI Investors<\/strong> 113 TTJ 511 (Mum), RBK Securities<\/a><\/strong> 118 TTJ 465 (Mum), P. S. Kapur<\/strong> 120 TTJ 422 (Jp) and others are impliedly overruled.\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A \u2018derivative\u2019 is a security representing the value of the underlying stocks and shares and must be given the same treatment as that given to the stocks and shares<\/strong>. Also, s. 43 (5) uses the term \u201ccommodity\u201d in a wide sense and covers \u2018derivatives\u2019. Further, the fact that s. 43(5)(d) exempts certain derivatives from the ambit of the definition of \u2018speculative transaction\u2019 shows that they would otherwise have come within that term as otherwise the amendment would be redundant.<\/p>\n

Read more ›<\/a><\/div>\n

<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,8],"tags":[],"class_list":["post-895","post","type-post","status-publish","format-standard","hentry","category-all-judgements","category-tribunal"],"acf":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/895","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/comments?post=895"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/895\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=895"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/categories?post=895"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/tags?post=895"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}