2016 (11) TMI 1589 - HC - Income Tax

Disallowance of loss being speculative loss - Held that - We find that both the CIT(A) and the Tribunal have come to a concurrent finding of fact that actual delivery of the bullion had taken place. Therefore the loss on account of trading in bullion was not a speculative loss but a business loss. Thus the above finding of fact led to allowing the loss on account of trading in bullion being set off as a business loss from the profits made on account of consultancy in mining. This concurrent findings of fact by the CIT(A) and the Tribunal has not shown to be perverse in any manner. No substantial question of law

Summary

Issues:
1. Whether the loss of Rs. 2.64 crores on bullion trading was speculative loss or normal business loss for Assessment Year 2008-09?

Analysis:
The appeal challenged an order by the Income Tax Appellate Tribunal regarding the treatment of a loss of Rs. 2.64 crores on bullion trading for the Assessment Year 2008-09. The Revenue contended that the Tribunal erred in holding the loss as not speculative. The Respondent, engaged in consultancy for mining and trading of gold bullion, declared an income of Rs. 13.12 crores after setting off the loss from a profit of Rs. 16.94 crores. The Assessing Officer disallowed the loss as speculative due to the lack of actual delivery of gold. However, the Commissioner of Income Tax (Appeals) found that actual delivery had occurred, supported by parties involved and delivery notes, allowing the loss as a normal business loss. The Tribunal upheld this decision, emphasizing the factual finding of actual delivery. The High Court concurred with the lower authorities, stating that the loss was a business loss, not speculative, and dismissed the appeal. The question raised by the Revenue was deemed not substantial, leading to the dismissal of the appeal without costs.