S. 43(5): Derivatives can be speculative transactions: ITAT Mumbai

ACIT Vs. Dinesh K. Mehta HUF (ITAT Mumbai) S. 43(5): Derivatives are speculative transactions if not for bona fide hedging In respect of AY 2005- 06, the assessee, a dealer in shares, entered into transaction of purchases of Nifty Futures, which being a derivative instrument, was settled by payment of differences and not actual delivery of shares. The assessee argued that the transactions were hedging transactions meant to minimise the loss due to fluctuation of price of shares held as stock-in-trade and could not be regarded as speculative transactions u/s 43(5) so as to disallow the loss fro...