speculative transactions

Exchange traded derivative transactions carried on by the assessee during AY 2003-04 are speculative transactions covered under Section 43(5) of the Act and the loss incurred in those transactions are liable to be treated as speculative loss and not business loss. We further hold that clause (d) inserted to the proviso to Section 43(5) with effect from 1/4/2006 is prospective in nature and the ITAT was in error in holding that clause (d) to the proviso to Section 43(5) a.. Full Article

This Tax Alert summarizes a recent ruling of the Special Bench (SB) of Kolkata Income Tax Appellate Tribunal (ITAT) in the case of Shree Capital Services Ltd. (Taxpayer) vs. ACIT (ITA No. 1294 (Kol) of 2008) in which the SB held that, prior to financial year 2005-06 (assessment year 2006-07), derivative transactions in shares were covered by the definition of speculative transactions (ST). The SB further held that the exception to the definition of ST, from tax year 2005.. Full Article

Recently, the Special Bench of the Kolkata Income-tax Appellate Tribunal (the Tribunal) in the case of Shree Capital Services Ltd. v. ACIT (2009-TIOL-542-ITAT-KOL-SB) while dealing with a case prior to the amendment to section 43(5) of the Income-tax Act, 1961 (the Act) exempting derivative transaction as speculative in nature, held that the derivative transactions will be considered as speculative transaction under section 43(5) of the Act. Further, it was also held tha.. Full Article

SUMMARY OF CASE LAW F&O transactions are not speculative transactions and thus, the income from such transactions cannot be set off against the speculation loss. Full Article

CASE LAW DETAILS In thee Case of : Shree Capital Services vs. ACIT  , Decided By :ITAT Kolkota Special Bench, Decide on : 31/07/2009, Appeal No.: I.T.A. No. 1294 (KOL) of 2008, Assessment Year :- 2004-05 SUMMARY OF THE CASE LAW In respect of AY 2004-2005, the assessee suffered a loss on account of trading [...] Full Article

SUMMARY OF CASE LAW Speculative transactions In case of a company, if part of its business consists of dealing in shares then all types of transactions, whether delivery based or non-delivery based, will be treated as speculative transactions. Full Article

R. B. K. Securities vs. ITO (ITAT Mumbai) -Even prior to the amendment to s. 43(5) by the Finance Act 2005 w.e.f 1.4.2006, dealings in Futures & Options and other derivatives products cannot be treated as speculative transactions as they are special kind of transactions, not involving purchase and sale of shares and consequently the loss arising therefrom cannot be treated as a speculation loss. Full Article

THE Assessing Officer during the course of assessment proceedings observed that the assessee has claimed share trading loss of Rs.7,91,263/ -. From the various bills furnished by the assessee including the brokers notes, the Assessing Officer observed that the assessee has not taken physical delivery of shares purchased but only paid margin money. Since actual delivery of shares were not taken by the assessee the Assessing Officer treated the transactions as speculative .. Full Article