FII’s Income from trading in futures and options is business income

Facts

• The applicant is a public company incorporated in Canada. It is engaged in the business of banking and other financial services. It also trades in securities (including derivatives) in various parts of the world.
• The applicant is registered as a Foreign Institutional Investor (FII) with Securities Exchange Board of India (SEBI) and is mainly dealing in the derivatives segment of the Indian Stock Exchanges.The applicant is trading in stock / index futures and stock / index options. It has also proposed to undertake the purchase and sale of shares and futures that are carried on as a part of an ^?index arbitrage activity^?.
• The applicant sought a ruling on following issues:

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