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In nutshell picture emerges as under :-

 Profit/Loss                 As Per Books         As per Broker      Page No.
                                                  statement
 Intraday(speculation)       (12,93,285)          (1,05,461)         21B
 Delivery (net of stock)     13,33,736            1,89,801           21B
 Profit From share trading   40,451               84,341             21B

The ld. first appellate authority has called for a remand report from the AO on the ground that AO has not provided sufficient opportunity of hearing to the assessee. But somehow the ld. AO firstly did not submit the report and thereafter he just reiterated his stand as was in the assessment order. The ld. AO did not go through the evidence submitted by the assessee and on which remand report was called for. Under these compelling circumstances, the ld. first appellate authority has examined the facts and deleted the disallowance. The following observations of ld. first appellate authority are worth to note ''3.4 The sales figures of intraday share transactions was verifiable from the 10DB report but the Assessing Officer had not considered these figures. The details of purchases and sales of intraday share transactions are as per the statements of both the brokers and considered as correct. Since the appellant had paid the STT of Rs.65,428/- (Rs.39,740/- + Rs.25,688/-) on the sales of intraday shares transactions as per 10DB report, the sales figures cannot be doubted. As per the above working, there was a profit of Rs.1,89,801/- in the shares transactions of delivery based shares and there was a loss of Rs.1,05,461/- in the intraday shares transactions and the net result was the profit Asst. Year 2008-09 of Rs.84,340/- on account of the transactions in shares. The AO had mentioned in the assessment order that speculation loss is disallowable u/s 73 of the Act. However, the provisions of sec.73 cannot be applied in the case of the assessee after the amendment of the provisions of section 43(5). All the transactions have been routed through the stock exchanges (BSE and NSE) through the two brokers and STT had also been paid which is verifiable from the 10DB report. Thus, the intraday share transactions cannot be considered as speculation transactions but will be considered as business transactions and the resultant profit or loss will be considered as business income or the business loss. Therefore, the share transaction loss of Rs.105,461/- is to be set off against the share transaction profit of Rs.1,89,801/- on delivery based shares. The AO is therefore, directed to consider the profit of Rs.84,340/- on account of shares transactions. Thus there was no loss for the addition of Rs.12,93,066/- and the same is hereby deleted. The AO is directed to replace the above working in the return of income if required. The second and third ground of appeal are accordingly allowed."

4. With the assistance of ld. representative we have gone through the record carefully. The important feature emerges out in this appeal is whether CIT(A) has committed an error by considering the brokers' note, details of STT payment and report in form 10DB over and above the audit report. If we go by the audit report then there is a loss in the share trading transactions. If we accept and appreciate the findings of CIT(A) on the basis of evidences submitted by the assessee then, there is a profit in the share transactions. In that situation it is also to be appreciated that all the shares i.e. delivery base as well as intraday transaction were routed through stock exchanges and subject to STT payment. In such situation the transactions of the assessee would not be considered as a speculative transaction in view of section 43(5) of the I.T. Act. The ld. AO did not comment on these evidences in spite of providing opportunity to him. He simply stuck to his stand which was harbored on the basis of ex parte examination of the details. We further find that the AO had issued notices on 29th January, 2010 and 6th Asst. Year 2008-09 September, 2010 for the sake of issuance of notices. He did not pursue the proceedings after issuance of notices. Because there is almost 9 months gap between these two dates while he had not issued notice in between. Thus if we weigh the manner in which the assessment order has been passed vis-à-vis the details appreciated by the ld. first appellate authority then the scale would certainly tilt in favour of first appellate authority. The ld. CIT(A) has gone through the evidences submitted by the assessee and thereafter worked out the figure that assessee has a profit in the share transactions. After considering the order of CIT(A) we do not see any reason to interfere in it. The appeal of Revenue is devoid of any merit, hence dismissed.