DCIT RG 5(3), MUMBAI V. SUPRATHAN INVESTMENT SERVICES P. LTD, MUMBAI

ITA 1426/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7848 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 03-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NAVEEN GUPTA
• Keywords: Speculation loss
• Section: 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI RAJENDRA SINGH ,(AM) ITA NO.1426/MUM/2009 ASSESSMENT YEAR : 2005-06 DY. COMMISSIONER OF INCOME TAX RANGE-5(3) ROOM NO.573, 5 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ..( APPELLANT ) VS. M/S. SUPRATHAN INVESTMENT SERVICES P. LTD. 156 HILL VIEW, RIDGE ROAD MALABAR HILL MUMBAI-400 006. ..( RESPONDENT ) P.A. NO. (AATCS 0779 D) APPELLANT BY : SHRI NAVEEN GUPTA RESPONDENT BY : MS. AARTI VISSANJI O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 13.1.2009 PASSED BY THE LD. CIT(A) FOR TH E ASSESSMENT YEAR 2005-06 TAKING FOLLOWING EFFECTIVE GROUND OF A PPEAL. 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS RIGHT IN TREATIN G THE LOSS ON FUTURE AND OPTION TRANSACTIONS AMOUNTING TO RS.83,09,023/- AS BUSINESS LOSS AGAINST THE SPECULA TION ITA NO.1426/M/09 A.Y: 05-06 2 LOSS ASSESSED BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACTS ON THE RECORD. 2. AT THE TIME OF HEARING BOTH PARTIES HAVE AGREED T HAT THE ABOVE ISSUE IS FULLY COVERED IN FAVOUR OF THE REVENUE AND A GAINST THE ASSESSEE BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUN AL IN SHREE CAPITAL SERVICES LTD., THEREFORE, THE ISSUE MAY BE DECID ED ACCORDINGLY. 3. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL P ARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND ME RIT IN THE PLEA OF THE PARTIES. IN SHREE CAPITAL SERVICES LTD. VS. ACIT (2009) 121 ITD 498(KOL.)(SB); (2009) 318 ITR (AT) 1(KOL.)(SB), IT HAS BEEN HELD (AT PAGE-2 OF 318 ITR HEADNOTE): HELD ACCORDINGLY, DISMISSING THE APPEAL, THAT THE TRANSACTION IN DERIVATIVES WAS A SPECULATIVE TRANSA CTION AS PROVIDED UNDER SECTION 43(5) AND THE TRANSACTION IN DERIVATIVES WAS NOT EXEMPTED FROM THE PURVIEW OF SPECULATIVE TRANSACTION UNDER SECTION 43(5) AND THE ASSESSING OFFICER WAS RIGHT IN TREATING THE LOSS AS SPECULATION LOSS IN TERMS OF SECTION 43(5) OF THE I NCOME TAX ACT, 1961 RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL SUPRA , WE HOLD THAT THE LOSS ON FUTURES AND OPTIONS TRANSACTIONS IS A SPECULATI VE TRANSACTION, NOT EXEMPTED FROM THE PURVIEW OF SPECULATIVE TRANSACTIO N U/S.43(5) OF THE INCOME TAX ACT, 1961 (THE ACT) AND THE AO WAS RIGH T IN TREATING THE LOSS AS SPECULATION LOSS IN TERMS OF SEC.43(5) OF THE A CT. ITA NO.1426/M/09 A.Y: 05-06 3 ACCORDINGLY THE ORDER PASSED BY THE LD. CIT(A) IS REVE RSED AND THAT OF AO IS RESTORED. THE GROUNDS TAKEN BY THE REVENUE ARE THEREFORE ALLOWED. 4. IN THE RESULT, REVENUE APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.02.2010 SD/- SD/- (RAJENDRA SINGH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED:01.02.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR E BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI. ITA NO.1426/M/09 A.Y: 05-06 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 13.1.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 14.1.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 01.02.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 03.02.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER