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2021 (10) TMI 1019 - AT - Income TaxSpeculative business / transaction - Disallowance of loss suffered by the assessee on account of ‘Sauda Settlement’ - disallowance being in respect of a specific loss or expenditure, made on the basis of non-acceptance of the assessee’s explanation qua the same - HELD THAT:- The assessee shall not be, because of the transaction being open-ended and, in any case, unsupported by any materials, saved by section 43(5)(a). The same, being carried in the regular course of the assessee’s business, shall qualify for being set off only against the profits of a speculative business which, in terms of Explanation 2 to section 28, is to be regarded as a separate and distinct business. There is, thus, no question of it being set off against the assessee’s other, regular business of trading in food grains and oilseeds or, as stated before me, of commission agent/broker. This, further, would also result in non-explanation of the recovery of railway freight by the assessee therefrom. This also explains of this being stated as in the alternative, even as, as afore-stated, it is also without any details or material in support. Again, much less several, as claimed, no similar bargain stands shown as executed during the year, or even in the past, even as the same does not detract from the fact that the bargain under reference is wholly unproved, so that the factum of other bargains would not impact positively on the allowance of this transaction. Such transactions would, similarly, result in either a gain or a loss to the assessee, also demonstrating the manner in which the same is accounted for. There is complete opaqueness about the nature and truth of the transaction/s between the assessee and SAOL, including the impugned credit of ₹ 10,43,274 thereto on 31/03/2013. The same thus cannot be regarded as a business loss and, in any case, is not available for set off against the business profit from its’ wholesale business. The same stands rightly disallowed by the Revenue. - Decided against assessee.
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