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2018 (9) TMI 2104 - ITAT COCHINRevision u/s 263 - applicability of Explanation to section 73 so as to consider the deemed speculation loss from trading of shares and disallowing set off of deemed speculation loss from trading of shares out of the business income - CIT opined that in view of Explanation to section 73 introduced by Finance (No. 2) Act, 2014 which is applicable form assessment year 2015-16, the assessee cannot be granted set off of deemed speculation loss from trading of shares out of the business income of the assessee - HELD THAT:- The amendment inserted to Explanation to section 73 by Finance (No. 2) Act, 2014 is to be applied retrospectively from the date of insertion to Explanation to section 73 of the Act. In coming to this view, we take support from the judgment in the case of CIT vs. Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] wherein Their Lordships were considering the amendment made by the Finance Act, 2003 by omitting the second proviso to section 43B of the Act w.e.f. 01/04/2004 and bringing about uniformity in the first proviso by equating tax, duty cess and fees with contribution to welfare funds viz. Provident Fund, etc. The Supreme Court held that the aforesaid amendment in section 43B of the Act by Finance Act, 2003 is curative in nature and would therefore apply retrospectively w.e.f. 01/04/1988. In the present case, the principle business of the assessee is trading in shares. Hence, deemed speculative loss from trading in shares is to be set off of against the business income of the assessee. This ground of the assessee is allowed. CIT initiated the proceedings u/s. 263 of the Act based on the recommendations of the AO - We find that this argument is not based on any material borne on record. Accordingly, this argument of the Ld. AR is rejected. Judicial discipline requires consistency in the income tax proceedings - According to the Ld. AR res judicata does not apply to income tax proceedings. Though, each assessment year being a unit, what was decided in one year might not apply in the following year; where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order; it would not be at all appropriate to allow the position to be changed in a subsequent year. In the present case, non-consideration of one issue in one assessment year does not give vested right to the assessee to derive benefit from such an error committed by the AO. In our opinion, perpetuating the error is not heroism. This argument of the Ld. AR is rejected. Appeal filed by the assessee is partly allowed.
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