2023 (7) TMI 699 - SCH - Income Tax

Permissible deduction in the hands of the assessee - marked to market loss on open equity stock future contracts - ITAT had specifically rejected the Department s contention that the market loss of stock in trade is not an ascertained liability. Thereby deduction of the amount on account of the market loss suffered on stock in trade was held in favour of the assessee as relying upon case of United Commercial Bank Calcutta v. Commissioner of Income Tax W.B.-III Calcutta 1999 (9) TMI 4 - SUPREME COURT HELD THAT - We have considered the reasoning of both the forums. Upon reading the High Court s impugned judgment no infirmity is seen. As such no interference is called for in the present matter. Special Leave Petition stands dismissed.

Summary

Issues involved:
The issue involved in this case is whether the marked to market loss on open equity stock future contracts is a permissible deduction in the hands of the assessee.

The Commissioner of Income Tax (Appeals) held that the marked to market loss on open equity stock future contracts is a permissible deduction in the hands of the assessee. The Income Tax Appellate Tribunal (ITAT) rejected the Revenue's challenge on 21.12.2016, specifically dismissing the Department's contention that the market loss of stock in trade is not an ascertained liability. The ITAT relied on the case of United Commercial Bank, Calcutta v. Commissioner of Income Tax, W.B.-III, Calcutta reported in (1999) 8 SCC 338 to support its decision in favor of the assessee.

Upon considering the reasoning of both the forums, the High Court's impugned judgment was found to have no infirmity. Therefore, no interference was deemed necessary in the present matter. Consequently, the Special Leave Petition was dismissed, and any pending application(s) were closed.