Case Law Details
Chowdry Associates Vs ACIT (ITAT Delhi)
From the entirety of the events, we find that in the assessment year 2014-15, the assessee had made purchases in the middle or last week of June 2013 through M/s Anand Rathi Commodities Ltd. and M/s Philips Commodities Pvt. Ltd. The NSEL failed to fulfill its commitments and ultimately the Government had prohibited NSEL to make any transactions after 1st July 2013 . The details of outstanding unsettled transactions of the assessee through both the brokers has also been furnished to the revenue authorities by the NSEL.
The AO disallowed the losses as claimed by the assessee on the ground that transactions has carried out by the assessee are speculative transactions settled without the delivery in terms of Section 43(5) of the The AO in the assessment order reproduced the relevant provisions of Section 43 (5) upto sub-Section (d) of 45 (3). The AO stopped at short of sub- Section (d) without going further to sub-Section (e).
Reading further, sub-Section (e) which was introduced by the Finance Act, 2013 w.e.f. 1st April 2014 reveals that in respect of trading and commodity derivatives carried out in a recognized association shall not be a speculative transaction.
The revenue has clearly held that the assessee is in the trading of commodity Revenue, having said that failed to give the benefit of provisions of Section 43(5)(e). Hence, the transactions done by the assessee shall not be deemed to be a speculative transaction in terms of the provisions of the Act.
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