ITO, WD-15(4), KOLKATA, Kolkata V. M/s Nilliampathy Tracon Pvt. Ltd., Kolkata

ITA 538/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0819 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 29-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACH ARJEEADDL
• Keywords: Transactions in derivatives; Speculation loss
• Section: 43(5); 28

Judgement Text

1 ITA NO.474 & 538/KOL/2016 M/S. NILLIAMPATHY TRACON PVT. LTD. A.Y.2006-07 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH D KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & DR.ARJUN LAL SAINI, AM ] ITA NO.474/KOL/2016 ASSESSMENT YEAR : 2006-07 M/S. NILLIAMPATHY TRACON (P) LTD. -VS- A.C.I.T., CIRCLE-9, KOLKATA KOLKATA [PAN : AABCN 0114 C] (APPELLANT) (RESPONDENT) ITA NO.538/KOL/2016 ASSESSMENT YEAR : 2006-07 I.T.O., WARD-15(4) -VS- M/S. NILLIAMPATHY TRACON (P)LTD. KOLKATA KOLKATA (PAN:AABCN 0114 C) (APPELLANT) (RESPONDENT) FOR THE ASSESSEE : SHRI SUNIL SURANA, FCA FOR THE DEPARTMENT: SHRI ARINDAM BHATTACHARJEE, ADD L. CIT DATE OF HEARING : 27.11.2017. DATE OF PRONOUNCEMENT : 01.12.2017. ORDER PER N.V.VASUDEVAN, JM: ITA NO.474/KOL/2016 IS AN APPEAL BY THE ASSESSEE W HILE ITA NO.538/KOL/2016 IS AN APPEAL BY THE REVENUE. BOTH T HESE APPEALS ARE DIRECTED AGAINST THE ORDER DATED 11.01..2016 OF CIT(A)-19, KOLKATA R ELATING TO A.Y.2006-07. 2. THE ASSESSEE IS A NON BANKING FINANCE COMPANY. I N THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE DURING THE PREVIOUS YEAR HAD INCURRED LOSS OF RS.3,81,20,180/- ON ACCOUNT OF TRADING IN D ERIVATIVE TRANSACTIONS. UNDER SECTION 43(5)(D) OF THE INCOME TAX ACT, 1961 (ACT) WHICH WA S INSERTED BY FINANCE ACT, W.E.F. 01.04.2006 APPLICABLE FROM AY 2005-06. TRANSACTION S IN RESPECT OF TRADING IN DERIVATIVES CARRIED OUT IN THE RECOGNISED STOCK EXC HANGE WILL NOT BE REGARDED AS SPECULATIVE TRANSACTION. THE NOTIFICATION U/S 43(5) (D) OF THE ACT NOTIFYING WHICH ARE 2 ITA NO.474 & 538/KOL/2016 M/S. NILLIAMPATHY TRACON PVT. LTD. A.Y.2006-07 THE RECOGNISED STOCK EXCHANGES WHERE TRADING IN DER IVATIVES CARRIED OUT BY AN ASSESSEE WILL NOT BE REGARDED AS SPECULATIVE TRANSACTION WAS ISSUED ONLY N 25.01.2006. THOUGH THE LAW CAME INTO FORCE W.E.F. 1.4.2006, THE NOTIFI CATION OF RECOGNISED STOCK EXCHANGES WAS OPERATIONAL ONLY ON 25.01.2006. 3 . PRIOR TO INSERTION OF CLAUSE (D) TO THE PROVISO OF SECTION 43(5) BY THE FINANCE ACT , 2005 WITH EFFECT FROM 01-04-2006, THE LOSS INCURRED IN F&O TRANSACTIONS WAS TREATED AS SPECULATIVE LOSS AND NOT BUSINESS LOSS. CONSEQUE NT TO INTRODUCTION OF CLAUSE (D), A NOTIFICATION NO.2 OF 2006 DATED 25-01-2006 WAS ISS UED WHEREIN THE NATIONAL STOCK EXCHANGE, MUMBAI AND THE BOMBAY STOCK EXCHANGE, MUM BAI WERE RECOGNIZED AS STOCK EXCHANGES TO CARRY OUT THE ELIGIBLE TRANSACTI ON IN F&O SHARES. THE RECOGNITION WAS GRANTED TO THE TWO EXCHANGES WITH EFFECT FROM 2 5-01-2006. ACCORDING TO THE AO IT IS ONLY AFTER INSERTION OF CLAUSE (D) TO THE PRO VISO OF SECTION 43(5) BY THE FINANCE ACT , 2005 WITH EFFECT FROM 01-04-2006 AND NOTIFICATION DATED 25-01- 2006 THAT THE LOSS INCURRED ON TRADING OF DERIVATIVES WAS EXCLUDE D FROM THE DEFINITION OF 'SPECULATIVE TRANSACTION'. 4. THE AO WAS OF THE VIEW THAT THE LOSS DERIVED B Y THE ASSESSEE FROM TRADING IN DERIVATIVES CARRIED OUT PRIOR TO 25.01.2006 HAD TO BE REGARDED AS A SPECULATIVE TRANSACTION AND THEREFORE A SPECULATIVE LOSS. OUT OF THE LOSS OF RS.3,81,20,180/- ON ACCOUNT OF TRADING IN DERIVATIVES A LOSS OF RS.1,36 ,90,925/- WAS LOSS INCURRED PRIOR TO 25.01.2006. THE AO TREATED THE AFORESAID LOSS AS A SPECULATIVE LOSS AND HAD NOT ALLOWED SET OFF OF THE AFORESAID LOSS AGAINST THE O THER INCOME OF THE ASSESSEE. BEFORE CIT(A) THE ASSESSEE POINTED OUT THAT THE HONBLE IT AT IN THE CASE OF ARUN KUMAR SARAOGI IN ITA NO.2587/KOL/2009 DATED 07.01.2011 TO OK THE VIEW THAT ALL LOSSES FROM TRADING IN DERIVATIVES FROM 01.04.2005 SHOULD BE RE GARDED AS NORMAL BUSINESS LOSS AND NOT SPECULATIVE LOSS. THE FOLLOWING WERE THE RELEVA NT OBSERVATIONS OF THE TRIBUNAL IN THIS REGARD. 8. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREFUL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD, WE ARE OF THE CONSID ERED VIEW THAT THE FACTS OF THE PRESENT CASE ARE AKIN TO THE FACTS OF THE CASE DECIDED BY THE ITAT, MUMBAI 3 ITA NO.474 & 538/KOL/2016 M/S. NILLIAMPATHY TRACON PVT. LTD. A.Y.2006-07 BENCH IN ITA NO.6547/MUM/2009 WHEREAS THE FACTS OF THE ISSUE DECIDED BY THE SPECIAL BENCH ARE NOT SIMILAR TO THE ONE IN HAN D. WE CONSIDER IT TO NARRATE THE FACTS AS WELL AS THE CONCLUSION OF THE CASE DEC IDED BY THE ITAT, MUMBAI BENCH IN ITANO.6547/MUM/2009 AS UNDER: FACT : 'THE MATERIAL FACTS ARE NOT IN DISPUTE. THE ASSESSM ENT YEAR INVOLVED IS 2006-07, AND THE ASSESSEE HAS INCURRED LOSS OF R S 18,05,525, IN RESPECT OF 'FUTURE AND OPTIONS' TRANSACTIONS INCURR ED ON THE NATIONAL STOCK EXCHANGE OF INDIA ON 17TH, 23D AND 24TH JANUA RY 2006, WHICH WAS CLAIMED TO BE A NORMAL BUSINESS LOSS IN VIEW OF THE EXCEPTION CARVED OUT BY INSERTION OF CLAUSE (D) OF SECTION 43(5) BROUGHT TO STATUTE W.E.F 1ST APRIL 2006. THIS CLAIM HAS BEEN R EJECTED BY THE AUTHORITIES BELOW ON THE GROUND THAT, AS ON THE DAT E OF TRANSACTIONS, THE STOCK EXCHANGE WAS NOT NOTIFIED FOR THE PURPOSE S OF SECTION 43(5)(D) , AND, THEREFORE, EVEN THOUGH CLAUSE (D) CAME INTO FORCE WITH EFFECT FROM 1T APRIL 2006, THE IMPUGNED TRANSACTION S DID NOT SATISFY THE REQUIREMENTS OF SECTION 43(5)(D) TO THE EFFECT THAT TRANSACTIONS SHOULD BE ENTERED INTO IN A RECOGNIZED STOCK EXCHAN GE. SECTION 43 (5) DEFINES 'SPECULATIVE TRANSACTION MEANS A TRANSACTIO N IN WHICH A CONTRACT FOR THE PURCHASE OR SALE OF ANY COMMODITY, INCLUDING STOCKS AND SHARES, IS PERIODICALLY OR ULTIMATELY SETTLED O THERWISE THAN BY THE ACTUAL DELIVERY OR TRANSFER OF THE COMMODITY OR SCR IPS. HOWEVER, CLAUSE (D), WHICH WAS INSERTED WITH EFFECT FROM 1ST APRIL 2006, PROVIDES THAT AN ELIGIBLE TRANSACTION IN RESPECT OF TRADING OF DERIVATES CARRIED OUT IN A RECOGNIZED STOCK EXCHANGE SHALL NO T BE DEEMED TO BE A SPECULATIVE TRANSACTION. THERE IS ALSO NO DISPUTE THAT THE TRANSACTION FULFILS THE REQUIREMENTS OF BEING AN EL IGIBLE TRANSACTION IN RESPECT OF TRADING IN DERIVATES. AS FOR THE REQU IREMENT OF STOCK EXCHANGE BEING RECOGNIZED, AS SET OUT IN EXPLANATIO N (II) TO SECTION 43(5)(D) , ARE THAT THE STOCK EXCHANGE SHOULD , INTER ALIA, 'NOTIFIED BY THE CENTRAL GOVERNMENT FOR THIS PURPOSE'. IT IS AN ACCEPTED POSITION THAT NSE AND BSE HAVE BEEN GRANTED RECOGNITION, FOR THE PURPOSE OF SECTION 43(5)(D) , VIDE NOTIFICATION DATED 25TH JANUARY 2006 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, AND TH E POINT OF DISPUTE IS CONFINED TO THE QUESTION WHETHER THIS RECOGNITIO N WILL ALSO AFFECT THE TRANSACTIONS ENTERED INTO IN THE RELATED STOCK EXCHANGE PRIOR TO THE DATE OF RECOGNITION.' CONCLUSION : '7. WE FIND THAT IT IS UNDISPUTED POSITION THAT THE STOCK EXCHANGES, ON WHICH THE IMPUGNED TRANSACTIONS WERE CARRIED OUT , WERE DULY NOTIFIED ON 25TH JANUARY 2006, AND THAT IN ACCORDAN CE WITH THE VIEWS OF THE CO-ORDINATE BENCH IN THE CASE OF ANAND BUILDWELL (SUPRA), AS ALSO WITH THE VIEWS OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CLARIS LIFESCIENNCES (SUPRA), ONCE THE APPR OVAL IS GRANTED IN THE RELEVANT PREVIOUS YEAR, AND IN THE ABSENCE OF A NYTHING INDICATED 4 ITA NO.474 & 538/KOL/2016 M/S. NILLIAMPATHY TRACON PVT. LTD. A.Y.2006-07 TO THE CONTRARY, THE APPROVAL HAS TO BE TAKEN AS EF FECTIVE FROM THE BEGINNING OF THE RELEVANT YEAR. THE ISSUE IS THUS C OVERED, IN FAVOUR OF THE LINE OF REASONING ADOPTED BY THE ASSESSEE, BY D ECISION OF THE COORDINATE BENCH IN THE CASE OF ANAND BROTHERS (SUP RA) AND BY HON'BLE GUJARAT HIGH COURT'S JUDGMENT IN THE CASE O F CLARIS LIFESCIENCES (SUPRA). RESPECTFULLY FOLLOWING THESE DECISIONS, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND HOLD THAT THE DERIVATE TRANSACTIONS, ENTERED INTO BY THE ASSESSEE AT THE R ECOGNIZED STOCK EXCHANGES EVEN PRIOR TO THE DATE OF NOTIFICATION IN THE RELEVANT PREVIOUS YEAR, ARE TO BE TREATED AS COVERED BY THE EXCLUSION CLAUSE SET OUT IN SECTION 43(5)(D) . THE ASSESSEE GETS THE RELIEF ACCORDINGLY.' 8.1 KEEPING IN VIEW OF THE FACT THAT THE LD. D.R. C OULD NOT BRING ANY CONTRARY DECISION THAN THAT OF THE ONE RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE AND THE FACTS OF THE PRESENT CASE ARE UNDI SPUTEDLY AKIN TO THE ONE DECIDED BY THE MUMBAI BENCH OF THE ITAT, RESPECTFUL LY FOLLOWING THE SAME, WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND DIRECT THE AO TO TREAT THE LOSS AS SPECULATIVE LOSS. 5. THE CIT(A) AGREED WITH THE AFORESAID SUBMISSION S OF THE ASSESSEE AND HELD THAT LOSS IN DERIVATIVES INCURRED FROM 1.4.2005 SHOULD B E REGARDED AS SPECULATIVE LOSS AND NOT FROM 25.1.2006. 6. THE CIT(A), HOWEVER, FOUND THAT THE HONBLE DEL HI HIGH COURT IN THE CASE OF DLF COMMERCIAL DEVELOPERS LTD. (2013) 35 TAXMANN 280 (D ELHI) TOOK THE VIEW THAT THE DEFINITION OF SPECULATIVE TRANSACTION IS APPLICABLE ONLY IN THE CONTEXT OF SECTION 28 TO 41 DEALING WITH COMPUTATION OF INCOME AND DOES NOT APPLY TO SECTION 73 WHICH LAYS DOWN THE CONDITION FOR SET OFF OF LOSS. FOLLOWING T HE AFORESAID DECISION THE CIT(A) HELD THAT THE CLAIM OF THE ASSESSEE FOR SET OFF OF THE LOSS IN RESPECT OF TRADING IN DERIVATIVES CANNOT BE ALLOWED AND THAT HAS TO BE RE GARDED AS SPECULATIVE LOSS FOR THE PURPOSE OF SET OFF. 7. AGGRIEVED BY THE ACTION OF CIT(A) IN HOLDING THA T THE LOSS IN RESPECT OF TRADING IN DERIVATIVES CARRIED OUT FROM 01.04.2005 SHOULD B E REGARDED AS NORMAL BUSINESS LOSS THE REVENUE HAS PREFERRED THE APPEAL BEFORE THE TRI BUNAL RAISING THE FOLLOWING GROUND OF APPEAL : 5 ITA NO.474 & 538/KOL/2016 M/S. NILLIAMPATHY TRACON PVT. LTD. A.Y.2006-07 THE LD. CIT(A) ERRED IN HOLDING THAT THE LOSS OF R S.1,36,90,925/- IN DERIVATIVE TRANSACTION PRIOR TO THE NOTIFICATION OF THE NATION AL STOCK EXCHANGE DT. 25.01.2006 WAS COVERED BY THE EXCLUSION SET OUT IN SEC. 43(5)(D). THAT THE APPELLANT CRAVES THE LEAVES TO ADD, ALTER, MODIFY, CLUED OR DELETE ANY OF APPEAL. 8. AS FAR AS THE ASSESSEE IS CONCERNED THE ASSESSEE IS AGGRIEVED BY THE ACTION OF CT(A) IN NOT ALLOWING THE SET OFF OF LOSS IN RESPEC T OF TRADING IN DERIVATIVES WHICH WERE INCURRED BY THE ASSESSEE BETWEEN 01.04.2005 UP TO 24.01.2006 BY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CA SE OF DLF COMMERCIAL DEVELOPERS LTD. (SUPRA). THE GROUNDS RAISED BY THE ASSESEE REA D AS FOLLOWS :- 1. FOR THAT THE ORDER OF THE LD. CIT (A) IS ARBITR ARY, ILLEGAL AND BAD IN LAW. 2. FOR THAT THE LD. C.I.T(A) ERRED IN DIRECTING TH E AO APPLY THE PROVISIONS OF SECTION 73 OF THE INCOME TAX ACT ON THE DERIVATIVE TRANSACTION PRIOR TO 25.1.2006 AND TREAT THE SAME AS SPECULATION LOSS AND SHOULD H AVE FOLLOWED THE JUDGEMENT OF THE HIGH COURT IN FAVOUR OF THE ASSESSEE WHEN THERE WERE TWO CONTRADICTORY JUDGEMENTS ON THE SAME ISSUE. 3. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD AO ERRED IN DISALLOWING RS.9,52,230/ - AS RELATABLE TO THE SPEC ULATION LOSS. 4. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY AROUND BEFORE OR AT THE TIME OF HEARING. THE FIGURE OF LOSS HAS BEEN WRONGLY STATED IN THE G ROUNDS OF APPEAL RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL . 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FOR PR OPER ADJUDICATION OF THE ISSUE RAISED BY THE ASSESSEE IN ITS APPEAL IT IS NECESSAR Y TO LOOK AT THE PROVISIONS OF EXPLANATION TO SECTION 73 OF THE ACT WHICH READS AS FOLLOWS :- EXPLANATION.-WHERE ANY PART OF THE BUSINESS OF A C OMPANY [OTHER THAN A .COMPANY WHOSE GROSS TOTAL INCOME CONSISTS MAINLY O F INCOME WHICH IS CHARGEABLE' UNDER THE HEADS 'INTEREST ON SECURITIES ', 'INCOME FROM HOUSE PROPERTY', 'CAPITAL GAINS' AND 'INCOME FROM OTHER S OURCES'], OR A COMPANY [THE PRINCIPAL BUSINESS OF WHICH IS THE BUSINESS OF TRAD ING IN SHARES OR BANKING] OR THE GRANTING OF LOANS AND ADVANCES) CONSISTS IN THE PUR CHASE AND SALE OF SHARES OF 6 ITA NO.474 & 538/KOL/2016 M/S. NILLIAMPATHY TRACON PVT. LTD. A.Y.2006-07 OTHER COMPANIES, SUCH COMPANY SHALL, FOR THE PURPOS ES OF THIS SECTION, BE DEEMED TO BE CARRYING ON A SPECULATION BUSINESS TO THE EX TENT TO WHICH THE BUSINESS CONSISTS OF THE PURCHASE AND SALE OF SUCH SHARES. 10. IT CAN BEEN SEEN FROM THE AFORESAID EXPLANATION THAT THE AFORESAID EXPLANATION DOES NOT APPLY TO A COMPANY WHOSE GROSS TOTAL INCOM E COMPRISES MAINLY INCOME WHICH IS CHARGEABLE UNDER THE HEADS INTEREST ON SEC URITIES, INCOME FROM HOUSE PROPERTY, CAPITAL GAINS AND INCOME FROM OTHER SOURC ES. IT WAS THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE BEFORE US THAT THE GROSS T OTAL INCOME OF THE ASSESSEE UNDER THE HEAD CAPITAL GAINS IS MUCH MORE THAN THE OTHER HEAD S OF INCOME. IN THIS REGARD HE DREW OUR ATTENTION TO THE COMPUTATION OF TAXABLE INCOME OF THE AO IN THE ORDER OF ASSESSMENT. 11. THE LD. COUNSEL DREW OUR ATTENTION TO THE DECIS ION OF HE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS M/S. DARSHAN SECURITIES PVT. LTD. 341 ITR 556 (BOM). THE 7 ITA NO.474 & 538/KOL/2016 M/S. NILLIAMPATHY TRACON PVT. LTD. A.Y.2006-07 HONBLE BOMBAY HIGH COURT TOOK THE VIEW THAT THE WO RDS 'CONSISTS MAINLY' ARE INDICATIVE OF THE FACT THAT THE LEGISLATURE HAD IN ITS CONTEMPLATION THAT THE GROSS TOTAL INCOME CONSISTS PREDOMINANTLY OF INCOME FROM THE FO UR HEADS THAT ARE REFERRED TO THEREIN. OBVIOUSLY, IN COMPUTING THE GROSS TOTAL IN COME THE NORMAL PROVISIONS OF THE ACT MUST BE APPLIED AND IT IS ONLY THEREAFTER, THAT IT HAS TO BE DETERMINED AS TO WHETHER THE GROSS TOTAL INCOME SO COMPUTED CONSISTS MAINLY OF INCOME WHICH IS CHARGEABLE UNDER THE HEADS REFERRED TO IN THE EXPLANATION. 12. THE AFORESAID DECISION WAS FOLLOWED BY THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS MIDDLETON INVESTMENT & TRADING CO. L TD. 196 OF 1999 JUDGMENT DATED 15.01.2014. APPLYING THE RATIO LAID DOWN IN THE AF ORESAID DECISION, WE FIND THE FOLLOWING FACTUAL POSITION IN THE CASE OF THE ASSES SEE : 1. THE ASSESSEE IS OUT OF THE PURVIEW OF THE SAID EXPLANATION TO SECTION 73 SINCE THE INCOME FROM BUSINESS AS COMPUTED BY THE AO HIMS ELF IS LOSS OF RS.74.43 LAKHS WHICH IS MUCH LESS THAN THE INCOME FROM CAPIT AL GAINS OF RS. 3.86 CRORES. THEREFORE THE ASSESSEE FALLS OUTSIDE THE MISCHIEF O F EXPLANATION TO SECTION 73. 2. EVEN IF THE COMPUTATION UNDER BOTH THE HEADS IS COMPARED AFTER ALLOWING THE LOSS OF RS. 1.36 CRORES, THEN ALSO THE INCOME FROM BUSINESS WOULD BE (-74.43 LAKHS + 1.36 CRORES) RS. 62 LAKHS WHICH IS AGAIN MU CH LESS THAN THE INCOME FROM CAPITAL GAINS OF RS. 3.86 CRORES. 3. EVEN IF THE COMPUTATION UNDER BOTH THE HEADS IS COMPARED AFTER ALLOWING THE LOSS OF RS. 1.36 CRORES AND THE LOSS OF RS.2.44 CRO RES POST 25/01/2006 (WHICH HAS NEITHER BEEN TREATED AS SPECULATIVE BY THE AO OR TH E CIT(A)) ,THEN ALSO THE INCOME FROM BUSINESS WOULD BE (-74.43 LAKHS + 1.36 CRORES + 2.44 CRORES) RS. 3.06 CRORES WHICH IS AGAIN MUCH LESS THAN THE INCOM E FROM CAPITAL GAINS OF RS. 3.86 CRORES. 13. THEREFORE THE SET OFF CLAIMED BY THE ASSESSE CA NNOT BE DENIED BY RELYING ON THE EXPLANATION TO SECTION 73 OF THE ACT AND THE DECISI ON OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DLF COMMERCIAL DEVELOPERS LTD. (SUPR A). THE SET OFF CLAIMED BY THE ASSESSEE IS THEREFORE DIRECTED TO BE ALLOWED. THE A PPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 8 ITA NO.474 & 538/KOL/2016 M/S. NILLIAMPATHY TRACON PVT. LTD. A.Y.2006-07 14. AS FAR AS THE APPEAL OF THE REVENUE IS CONCERNE D, WE FIND THAT THE ISSUE AS TO WHETHER TRANSACTION OF TRADING IN DERIVATIVES AND P ROFIT OR LOSS FROM SUCH TRANSACTION SHOULD BE REGARDED AS A NORMAL BUSINESS LOSS FROM 0 1.04.2005 OR FROM 25.01.2006 HAS BEEN CONCLUDED BY THE DECISION OF THE HONBLE SPECI AL BENCH OF ITAT, KOLKATA IN THE CASE OF SHREE CAPITAL SERVICES 318 ITR (AT) 1 (SB) (CAL) IN WHICH IT WAS HELD THAT THE SEC.43(5)(D) OF THE ACT APPLIES FROM AY 2006-07. T HE DECISION IN THE CASE OF ARUN KUMAR SARAOGI (SUPRA) ALSO SUPPORTS THE VIEW TAKEN BY THE CIT(A). IN VIEW OF THE AFORESAID DECISIONS, WE ARE OF THE VIEW THAT THERE IS NO MERIT IN THE APPEAL BY THE REVENUE. 15. IN THE RESULT THE APPEAL BY THE REVENUE IS DISM ISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 01.12.2017. SD/- SD/- [DR.A.L.SAINI] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01.12.2017. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. NILLIAMPATHY TRACON PVT. :LTD., 187, RABINDR A SARANI, KOLKATA-700007. 2.A.C.I.T. CIRCLE-9, KOLKATA.. 3. CIT(A)-19, KOLKATA. 4. CIT-3, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHES 9 ITA NO.474 & 538/KOL/2016 M/S. NILLIAMPATHY TRACON PVT. LTD. A.Y.2006-07