Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (9) TMI 76 - ITAT MUMBAILoss on account of Mark to Market - Speculation or non speculation loss (Business Loss) - loss incurred on futures and options (derivative transactions) - Section Section 43(5)(d) - whether the provisions of Explanation to Section 73 of the Act per se could be made applicable to the facts of the instant case? - HELD THAT:- In terms of Section 43(5)(d) of the Act, the loss incurred on futures and options (derivative transactions) would have to be construed only as business loss and hence the provisions of Section 73 and its explanation thereon would not come into operation at all for the same. We also hold that Section 43(5)(d) of the Act should have to be first given effect while computing gross total income of the assessee before applying Section 73 and its Explanation thereon. - Accordingly, the set off of F & O losses with the regular business income done by the assessee is in order. Loss of share trading - HELD THAT:- What is left is only loss incurred on share trading and applicability of Explanation to Section 73 of the Act to the same. We have already held hereinabove that the gross total income mainly consists of income from house property, income from capital accounts and income from other sources for the assessee and thereby, the case of the assessee falls in the first exception carved out in Explanation to Section 73 - This view is further fortified by the decision in the case of CIT vs. HSBC Securities and Capital Markets India Pvt. Ltd. [2012 (6) TMI 715 - BOMBAY HIGH COURT] Principal business of the assessee, not being granting of loans and advances and thereby not eligible for exception and accordingly, the deeming fiction provided in Explanation to Section 73 would get attracted. The Hon’ble Apex Court in the case of Snowtex Investment Limited [2019 (5) TMI 1165 - SUPREME COURT] had merely upheld the action of the Hon’ble High Court in this regard. With regard to the amendment brought in Explanation to Section 73 of the Act w.e.f. 01/04/2015, the Hon’ble Apex Court held that it should be given only prospective application. This has been discussed till the end of the judgement i.e. till para 33. Ultimately, the Hon’ble Apex Court had only upheld the order of the Hon’ble Calcutta High Court. We find the decision of the Hon’ble Apex Court referred to supra is completely and effectively distinguishable with that of the assessee before us. Hence, we have no hesitation in holding that the said decision is not applicable to the facts before us and does not advance the case of the Revenue. On the contrary, the decision of the Hon’ble Bombay High Court relied upon by the ld. AR in [2012 (6) TMI 715 - BOMBAY HIGH COURT] is directly on the issue before us. Hence, the same would have to be followed in the facts and circumstances of the instant case. Accordingly, the ground No.1 raised by the Revenue is dismissed.
|