2010 (5) TMI 870 - AT - Income Tax

Summary

Issues involved:
The issue involves whether the income-tax authorities were correct in not allowing the set off of unabsorbed speculation loss of Rs. 4,55,30,494/- from the assessment year 2001-02 against the speculation income for the current year.

Judgment Details:

Issue 1: Set off of speculation loss
- The assessee claimed the right to set off speculation loss from 2001-02 against profits for 2006-07.
- The Assessing Officer refused, citing section 73(4) limiting loss carry forward to four years.
- Assessee argued for an eight-year carry forward period pre-amendment.
- Citing legal precedents, the Tribunal held that vested rights can only be taken away by express language or implication.
- Referring to previous cases, the Tribunal emphasized that accrued rights must be preserved unless expressly revoked.
- The Tribunal found no provision in section 73(4) or elsewhere expressly removing the assessee's right to carry forward speculation loss for eight years.
- The Tribunal noted the distinction between loss brought forward and loss to be carried forward, emphasizing that section 73(4) pertains to the latter.
- The Tribunal rejected the argument that a procedural provision applied, emphasizing the vested substantive right of the assessee.
- Consequently, the Tribunal upheld the assessee's claim to set off the speculation loss from 2001-02 against profits for 2006-07.

Conclusion:
The Tribunal ruled in favor of the assessee, directing the Assessing Officer to allow the set off of the speculation loss brought forward from the assessment year 2001-02 against the speculation profits for the year under appeal.