Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 427 - AT - Income TaxLoss from commodity trading business disallowed - refusal to allow to be set off against any other income or to be allowed to be carried forward for future set off against the income from speculation business - Held that:- We hold that without carrying out requisite enquiries as provided in the Act, merely treating the loss claimed to be a fictitious loss based on surmise and suspicion and by making general baseless allegations without bringing any evidence on record, the action of the Learned CIT(A) is unjustified. Hence the only point to be addressed in this issue is as to whether the activity of trading in commodity transactions by the assessee could be construed as speculation activity in the facts and circumstances of the case in the context of section 73 of the Act read with its Explanation thereon. We find that the Learned AO had treated the assessee’s activity of share trading to be normal business as according to him the principal business of assessee is granting of loans and advances. He had reached this conclusion on the ground that interest income on loans of ₹ 35,21,584/- is more than the income from share trading of ₹ 13,62,106/-. Accordingly he held that the assessee’s case falls under the exception to Explanation to Section 73 of the Act. Having concluded so, he ought to have treated the loss on commodity transactions as a normal business loss and allowed to be set off against the speculative income as admittedly in the instant case the profit from trading in shares has been accepted as arising from speculative business. Hence there was no need to make any addition towards loss on commodity transactions. - Decided in favour of assessee
|