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 transactions within the meaning of provisions of section 43(5) and treated the loss claimed by the assessee as speculative loss and allowed to be carried forward as per law.
In appeal the CIT(A) confirmed the action of the Assessing Officer.
The assessee is before the Tribunal with the plea that
Assessing Officer erred in considering the share trading transactions in the nature of speculative transactions and not considering the same as transactions in which constructive delivery has been effectively taken by the assessee. Accordingly, the learned Assessing Officer erred in not setting off the share trading loss against the other income of the appellant.
The Tribunal observed,
1. there is no dispute to the fact that the assessee was engaged in share trading business during the year and has claimed share trading loss of Rs.7,91,263/ -.
2. There is also no dispute to the fact that physical delivery of shares were not taken by the assessee except the shares relating to HFCL as claimed by the assessee.
3. There is also no dispute to the fact that the delivery of the share transactions are not reflected in demat account.
4. In absence of physical delivery of shares taken by the assessee the transactions clearly fall under the provisions of section 43(5) and are to be treated as speculative in nature.
Therefore, the Tribunal did not find any infirmity in the order of the CIT(A) in upholding the action of the Assessing Officer to this extent.
