Case Law Details
RELEVANT PARAGRAPH
4. We have perused the records and considered the rival contentions carefully. The dispute raised in this appeal is whether F & O transaction can be considered as speculative transaction or not. The speculative transactions have been defined in section 43(5) as transactions in which contract for purchase or sale of any commodity including stock of shares is periodically and ultimately settled otherwise than by the actual delivery or transfer of commodity or scrips. The said provisions is reproduced below as ready reference.
“43(5) Speculative transaction means a transaction in which a contract for the purchase or sale of any commodity including stocks and shares is periodically or ultimately settled otherwise than by actual delivery or transfer of the commodity or scripts.”
4.1 The Finance Act 2005 inserted clause (d) in section 43(5) as per which transactions in respect of trading in derivative were deemed to be not speculative transaction. The said sub clause is reproduced below as ready reference.
[(d) an eligible transaction in respect of trading in derivatives referred to in clause 31[(ac)] of section 2 32 of the Securities Contracts (Regulation) Act 1956 (42 of 1956) carried out in a recognised stock exchange;] shall not be deemed to be a speculative transaction;
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