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2014 (12) TMI 1249 - AT - Income TaxClaim of set off of loss of earlier years incurred on derivative transactions to adjust against profit earned on derivative transactions of current year - Held that:- It is not in dispute that the assessee has earned profit from the same business in which losses were incurred in the earlier years. The loss brought forward during all these years and gain made during the year is having same nature. There is no change in the nature earning of income during the year. In all the preceding years he was incurring losses in futures and options transactions but in current year he made gain. Nothing was brought on record by AO to allege that profit earned during the year was not out of future and option transaction. Thus the assessee was entitled to set off the carried forward losses of earlier assessment years against profits of the same business in this assessment year. The classification of business for the limited purpose of set off of past losses, into speculative and non-speculative is to be done on uniform basis and losses incurred in the same business in earlier assessment years are to be treated as eligible for set off against profit of the same business in the subsequent assessment years. For this reason also the assessee deserves to be allowed to set off of brought forward losses from business of dealing in derivatives, incurred in assessment years prior to assessment year 2006-2007 against profit of the same business in current assessment year 2006-2007. Thus speculative losses made on future option transactions in earlier years are eligible to be allowed to set off against the business income of future option transactions of current year. Based on the same in the present case the assessee is entitled to set off the carried forward losses of earlier year from the same business against profit of the business in this assessment year. - Decided in favour of assessee
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