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This appeal by the assessee is directed against order dated 12/06/2013 of learned Commissioner of Income-tax (Appeals)-2, Faridabad, for assessment year 2009-10, raising following grounds:

"1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and facts in confirming the action of Ld. AO in making an aggregate addition of Rs.27,63,30,230/- by denying the claim of set off of loss from shares and derivatives (Rs.17,27,16,630/- loss on account of trading in derivatives, Rs.10,10,75,192/- loss on account of trading in shares and Rs. 25,38,408/- loss on account of intraday trading in shares) in view of Explanation to section 73 of the Income Tax Act, 1961.
2. That in any view of the matter and in any case, order of Ld. CIT (A) in confirming the action of Ld. AO, in making the impugned addition by denying the set off of the loss aggregating to AY: 2009-10 Rs.27,63,30,230/- (Rs. 17,27,16,630/- loss on account of trading in derivatives, Rs.10,10,75,192/- loss on account of trading in shares and Rs. 25,38,408/- loss on account of intraday trading in shares) and framing the impugned assessment order, is bad in law and against the facts and circumstances of the case.
(i) loss on trading in shares through BSE/NSE Rs.10,10,75,192/-
(ii) loss on intraday trading on BSE/NSE in shares of Rs.25,38,407/-
(iii) loss on derivatives trading on NSE/BSE Rs.17,27,16,630/-

3.2 The assessee submitted that the transactions other than intraday were non-speculative and in any case was actual business losses and sale and purchase of shares was delivery based. It was further submitted that transactions in derivatives were also non-speculative, in compliance to section 43(5) of the Act. The Assessing Officer held that the assessee company was engaged in dealing in shares and, therefore, explanation to section 73 of the Act applies directly to the assessee and according to the said explanation if any part of the business of the company consists in the purchase and sale of shares of other companies, then for the purpose of section 73 of the Act, the assessee shall be deemed to be carrying on the speculation business to the extent of business of purchase and sale of such shares. Accordingly, the loss from trading in share amounting to Rs.10,10, 75,192/- was held as loss from speculation business. Similarly, he held that derivative transaction might not be speculative under section 43(5) of the Act, but when the dealing in those is undertaken by the company which forms the business of such company, the provision of Explanation to section 73 come into play. According to the Assessing Officer, the provision of section 73 are specific and relevant for the limited purpose of setoff of the business. In view of the observations, the Assessing Officer disallowed claim of setoff of the losses of Rs.27,63,30,230/- and addition was made accordingly. Before the learned Commissioner of Income-tax (Appeals), the assessee AY: 2009-10 contested loss of Rs.10,10,75,192/- on account of delivery based purchase and sale of shares and loss of Rs.17,27,16,630/- on account of derivative trading. After considering the various judicial pronouncements mentioned in the impugned order, the learned Commissioner of Income- tax (Appeals) upheld the finding of the Assessing Officer on the issue in dispute.

3.5 The learned counsel did not press in respect of intraday loss of Rs.25,38,407/-

3.6 On the other hand, the learned Commissioner of Income Tax (Departmental Representative) relied on the finding of the lower authorities and submitted that as far as loss from derivative transactions was concerned, the decision of the Hon'ble Delhi High Court in the case of CIT Vs. DLF Commercial Developers Ltd. (supra) might be followed wherein it is held that by all accounts derivatives are based on stocks and shares, which falls squarely within the Explanation to Section 73 and loss from sale/purchase of such derivative would be speculative loss. 3.7 We have heard the rival submission of the parties and perused the relevant material on the record. In the grounds raised by the assessee, two issues emerge before us. The first issue is whether loss from dealing in derivative transaction can be set of against business income or not. Second issue before us is whether loss from the purchase and sale of shares can be set of against the business income in terms of section 73 of the Act.