By Jagdish D. Shah, Jagdish Punjabi, Chartered Accountants
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Part B — Unreported Decisions
(Full texts of the following Tribunal decisions are available
at the Society’s office on written request. For members desiring that the
Society mails a copy to them, Rs.30 per decision will be charged for
photocopying and postage.)
6 R. B. K. Securities Ltd.
v. ITO
ITAT ‘B’ Bench Mumbai
Before G. C. Gupta (JM) and
A. L. Gehlot (AM)
ITA No. 2465/Mum./2006
A.Y. 2003-04. Decided on : 21-7-2008
Counsel for assessee/revenue : Prakash K. Jotwani/ Niraj
Bansal
S. 43(5) of the Income-tax Act, 1961 — Speculation loss —
Whether the loss suffered in F&O transactions could be considered as speculation
loss — Held, No.
Per G. C. Gupta :
Issue :
Whether the losses suffered in F&O transactions could be
considered as speculation loss.
Held :
Relying on the Mumbai Tribunal decision in the case of SSKI
Investors Services Pvt. Ltd., it was held that dealings in derivatives was a
separate kind of transaction which did not involve any purchase & sale of shares
and therefore loss on account of derivative trading cannot be treated as
speculative loss. Further, the Tribunal also referred to the Bangalore Tribunal
decision in the case of C. Bharath Kumar, where the constructive or implied
delivery was held to be as good as actual delivery. Based on the same, the
Tribunal held that the loss claimed by the assessee on F&O transaction was a
business loss and not speculation loss as contended by the Revenue.
Cases referred to :
1. DCIT v. SSKI Investors Services Pvt. Ltd., (2008)
113 TTJ (Mumbai) 511,
2. C. Bharath Kumar v. DCIT, (2005) 4 SOT 593 (Bang.)
