Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (5) TMI 270 - AT - Income TaxRevision - Carry forward and set off of business loss - whether or not the losses incurred in dealing in derivatives in earlier assessment years are eligible to set off against the profits from the same activity post amendment to definition of 'speculation transactions' under section 43(5) with effect from 1st April, 2006 - only purpose of segregating losses of speculation and non-speculation business is to ensure that the losses incurred by the assessee in speculation business, which lack sufficient transparency, and leave the scope for generating fictitious losses through artificial transactions or shifting of incidence of loss from one person to another, are not allowed to be set off against profits of another business other than a similar business - section 43(5) with effect from 1st April 2006, losses incurred in derivative trading are held to be eligible for being set off against normal business profits, as derivate trading itself is treated as a non-speculative business, and losses of any non- speculative businesses can be adjusted profits of any non-speculative business the provisions of carry forward and set off are to be construed in a manner so as not to defeat the plain and unambiguous intention of the legislature - this amendment was to provide relief to the taxpayers and is to be viewed as beneficial provisions, as such, and one cannot possibly proceed on the basis that the object of making amendment in section 43(5) was to kill the brought forward losses of dealing in derivatives or make them ineligible for being set off against the profits of the same business in subsequent years - Decided in the favour of the assessee
|