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2024 (1) TMI 842 - AT - Income TaxNature of loss - commodities transactions - Addition made u/s 43(5) - speculative loss or business loss - Assessee had indulged in trading in commodities derivatives on National Sport Exchange Limited (NSEL) through his broker - nature of transaction and investment made by the future and options by entering the contract - Assessee submitted that the Assessee had suffered loss on account of NSEL Scam in commodity market. The loss was booked on account of bad debts written off by the Assessee during the relevant previous year. The debts arisen in the normal course of business - AO concluded that the Assessee had undertaken speculative and non-speculative trades but had not maintained separate accounts, thus treating the loss as speculative loss permitted to be set off against speculative profit and gains of other speculative business only in terms of Section 73 of the Act. - CIT(A) concluded that all the transactions undertaken by the Assessee were not non-speculative in nature and thereby discarded the incorrect bifurcation made by the Assessing Officer and allowed the set off of loss HELD THAT:- We find no infirmity in the order passed by the CIT(A) as the CIT(A) has granted relief by following the decision of Mumbai Bench of the Tribunal in the case of Nirshilp Securities Pvt. Ltd [2021 (6) TMI 814 - ITAT MUMBAI] wherein it has been held that the commodities transaction undertaken on NSEL were paired purchase & sale transactions backed by the delivery of commodities as per warehouse receipt issued/retained by NSEL accredited warehouses which did not fall in the definition of ‘speculative transaction’ as defined in Section 43(5) of the Act. The aforesaid decision of the Tribunal in the case of Nirshilp Securities Pvt. Ltd. has been followed in the case of Smt. Asha Devi Poddar [2022 (8) TMI 1476 - ITAT MUMBAI] - Respectfully following the aforesaid decisions of the Tribunal we decline to interfere with the order passed by the CIT(A). Ground No. 1 to 3 raised by the Revenue are dismissed.
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