- Trading of Shares Through Smart Phones More Than Doubled in 2014-15 (Till February 2015) as Compared to Last Year (2013-14) Trading of shares through smart phones has increased. The Securities and Exchange Board of India (SEBI) permitted securities trading using wireless technology vide its circular dated August 27, 2010. The said circular deals with trading […]
- Trading of Shares Through Smart Phones More Than Doubled in 2014-15
Trading of Shares Through Smart Phones More Than Doubled in 2014-15 (Till February 2015) as Compared to Last Year (2013-14)
Trading of shares through smart phones has increased. The Securities and Exchange Board of India (SEBI) permitted securities trading using wireless technology vide its circular dated August 27, 2010. The said circular deals with trading using devises such as mobile phones, laptops with data cards etc, which use Internet Protocol.
Based on information provided by SEBI, the details regarding trading of shares through Securities Trading using Wireless Technology (STWT) in Cash Market of NSE and BSE in the last three financial years (i.e., 2012-13, 2013-14 and 2014-15 till February 2015) are given below:
| 2012-13 | 2013-14 | 2014-2015 (till Feb 2015) | |
| Turnover on account of trades undertaken using STWT (in Rs. crores) | 19,871.20 | 38,523.54 | 90,597.98 |
Source: SEBI
SEBI Circular dated August 27, 2010 contains, inter alia, directions to stock exchanges, with which the exchanges are required to assure compliance of brokers. These include:
i) To ensure secure access, encryption and security of communication for internet-based trading and securities trading using wireless technology. The level of encryption in this regard is governed by Department of Telecommunications, policy regulation.
ii) Adequate measures to be provided for user identification and authentication and access control to prevent misuse of such facility by unauthorized persons.
iii) Unique identification number as given in case of internet based trading shall be made applicable for securities trading using wireless technology.
iv) Additional provisions specifying possible risks, responsibilities and liabilities associated with securities trading using wireless technology are required to be incorporated in the Broker-Client agreement as an addendum or by bringing to the notice of clients, who are desirous of availing such facility, and taking their concurrence on the same.
v) Further, the said Circular requires network security protocols and interface standards to be as per prevalent industry standards and sound audit trails to be available for all transactions conducted using wireless devices.
vi) In addition, the stock exchanges are required to arrange periodic systems of broker systems to ensure that the requirements specified in the SEBI circular are being satisfied.
vii) Stock exchange shall also include securities trading using wireless technology in their ongoing investor awareness and educational progamme.
This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today. (Source- PIB)
PFA
The Hon'ble High Court further observed that in these circumstances if both the parties for nearly a decade proceeded on the footing that section 194J is not attracted, then in the assessment year in question, no fault can be found with the assessee in not deducting tax at source under section 194J of the Act and consequently, no action could be taken under section 40(a)(ia) of the Act. As the Return of income for the year under consideration was filed on 14/08/2009 and this decision of the Hon'ble was pronounced on 21/10/2011. Thus, the assessee had already filed the return of income and the time period for deducting tax at source was also lapsed. Considering these peculiar facts, in our considered opinion no disallowance on this account should be made for the year under consideration
| (i) Mark-to-market loss on interest rate swap contracts is not a notional loss, (ii) Benefit against s. 40(a)(ia) disallowance conferred in Kotak Securities 340 ITR 333 (Bom) has to be extended to cases where ROI was filed pre-delivery of the verdict |
(i) It is an undisputed fact that the assessee has made the valuation of interest rate Swap contracts as at the end of the year. It is also an undisputed fact that assessee had incurred losses on such valuation. The said losses have been claimed as deduction in the P&L Account. It is also an undisputed fact that the assessee has made the entries following Accounting Standard, AS-11 of the ICAI. Such losses being treated as mark to market the losses have been allowed by the Tribunal in series of cases following Special Bench decision in the case of Bank of Bahrain & Kuwait 132 TTJ 505 (Mum) (SB). The Hon'ble Supreme Court in the case of Woodward Governor India Pvt. Ltd 179 Taxman 326 (SC) has considered such losses as allowable and not of contingent in nature;
(ii) The disallowance under section 40(a)(ia) of the Act in respect of payments made to Bombay Stock Exchange is covered in favour of the assessee and against the Revenue except that the transaction charges have been considered to be subject to TDS by the decision of Hon'ble Bombay High Court in the case of Kotak Securities Ltd in Income Tax appeal No.3111 of 2009 (340 ITR 333). However, we find that the Hon'ble High Court has observed that section 194J was inserted w.e.f. 1/7/1995 and till assessment year 2005-06 both the Revenue and the assessee proceeded on the footing that section 194J was not applicable to the payment of transaction charges and accordingly during the period from 1995 to 2005 neither the assessee has deducted tax at source nor the Revenue has raised any objection. The Hon'ble High Court further observed that in these circumstances if both the parties for nearly a decade proceeded on the footing that section 194J is not attracted, then in the assessment year in question, no fault can be found with the assessee in not deducting tax at source under section 194J of the Act and consequently, no action could be taken under section 40(a)(ia) of the Act. As the Return of income for the year under consideration was filed on 14/08/2009 and this decision of the Hon'ble was pronounced on 21/10/2011. Thus, the assessee had already filed the return of income and the time period for deducting tax at source was also lapsed. Considering these peculiar facts, in our considered opinion no disallowance on this account should be made for the year under consideratio
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