Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (3) TMI 260 - ITAT AHMEDABADLosses incurred by the assessee from F & O operations - Speculation loss or business loss - as per CIT-A Assessee has shown the above loss as business loss from trading in derivatives which has been conducted on recognized stock exchange and accordingly as per proviso (d) to section 43(5), the F & O loss is not speculative loss - Whether CIT(A) has erred allowing the F&O loss as business loss contrary to explanation to Section 73? - HELD THAT:- As decided in case of Asian Financial Services Ltd.[2016 (3) TMI 685 - CALCUTTA HIGH COURT] that loss incurred on account of derivatives would be deemed business loss under proviso to section 43(5) and not speculation loss and, hence, Explanation to section 73 could not be applied and as such, loss would be allowed to be set off against income arising out of proper business because derivatives were treated differently within meaning of Explanation to section 73(4) and not at par with shares. In the case of Blue Berry Trading Co. (P.) Ltd. [2022 (9) TMI 76 - ITAT MUMBAI] the ITAT held that where assessee executed futures and options transactions in recognized stock exchange through SEBI registered share broker, said transactions would fall under exception provided in definition of speculative transactions in terms of section 43(5)(d), and loss incurred on same was to be treated as regular business loss. In the assessee’s own case of Magic Share Traders Ltd. [2019 (6) TMI 1392 - ITAT AHMEDABAD] the ITAT held that Loss incurred on account of derivatives would be deemed business loss under proviso to section 43(5) and not speculation loss and, hence, Explanation to section 73 could not be applicable; and such loss would be set off against income from business. In our considered view, we observe that various courts, including the ITAT in assessee’s own case for assessment year 2012-13 and assessment year 2013-14 has decided the issue on identical facts in favour of the assessee.
|