2013 (9) TMI 1247 - AT - Income Tax

Summary

Issues involved: Appeal filed by Revenue against CIT (A)'s order allowing loss on F & O to be adjusted against business profit u/s 43(5)(c) & (d) instead of u/s 73 read with 73(1) of the Income Tax Act 1961.

Summary:
1. The Revenue appealed against CIT (A)'s order allowing the adjustment of loss on F & O against business profit u/s 43(5)(c) & (d) instead of u/s 73 read with 73(1) of the Income Tax Act 1961.

2. The assessee, engaged in trading in share futures and options, filed its return declaring a loss. The Assessing Officer treated the loss as speculative, disallowing it to be set off against other business income.

3. The CIT (A) considered the submissions and held that the loss on F & O derivative trading should be treated as business loss, not speculative. The appellant provided evidence that the transactions were done through a recognized stock exchange.

4. The Revenue argued that share futures are derivatives of shares and should be treated as speculative. The AR argued that the loss in derivatives should be considered as normal business loss post-amendment in section 43(5).

5. The Tribunal found that the loss incurred in share futures was a normal business loss, not speculative, as per the amended section 43(5). Referring to a previous Delhi Tribunal decision, the Tribunal upheld CIT (A)'s order.

6. The Tribunal dismissed the Revenue's appeal, affirming that the loss incurred by the assessee was a normal business loss and not speculative, in line with the provisions of section 43(5).