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2015 (5) TMI 228 - DELHI HIGH COURT

2015 (5) TMI 228 - DELHI HIGH COURT - TMI - Penalty under Section 271(1)(c) - Disallowance of set-off loss on derivative trading by AO - AO also treated F&O derivatives as "business income", disallowing the capital loss claim - Held that:- When the present controversy arose, there was some divergence of opinion as to the character of such transactions and whether they constitute speculative loss. The introduction of Section 43(5)(b) and related provisions brought in its wake certain complication .....

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eld that since assessee filed full details of the sale of shares, he did not conceal any particulars of income mere treatment of the business loss as speculation loss by the Assessing Officer does not automatically warrant inference of concealment of income. The imposition of penalty was not warranted. It is accordingly directed to be deleted and the impugned order of the ITAT is set aside. - Decided in favour of assessee. - ITA No. 143/2015, CM Appl No. 3222/2015 - Dated:- 24-4-2015 - S. Ravi .....

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r concealment of material particulars to the tune of ₹ 54,28,629/- was warranted. 2. The assessee in its return for A.Y. 2007-08 had inter alia claimed loss of ₹ 1,61,27,836/- as Short-Term Capital Loss, on account of its trade in commodity derivatives. The Assessing Officer (AO) treated this as a "speculative loss" and disallowed this set of claims as against the profit. The AO also treated ₹ 86,53,403/- on account of F&O derivatives as "business income" .....

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he ITAT however, was not successful. The assessee, as a consequence, has preferred the present appeal under Section 260A. It is argued that the question whether the nature of loss in this case was speculative loss or not was a matter of considerable debate. In substantiation of this proposition, learned counsel relied upon a decision of the Gujarat High Court in CIT v. Navinchandra and Co. 2014 (222) Taxman 156 (Guj). The Gujarat High Court had inter alia observed as to whether such losses from .....

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elate back to the point of time when Section 43(5) was introduced to qualify for eligible treatment of such losses/profits. The assessee lastly relies upon a Division Bench ruling of this Court in CIT v. Auric Investments and Securities Ltd. 310 ITR Del 121. In that case, the ITAT had held in favour of the assessees. On the revenue's appeal, it was observed that: "14. So, it is clear from the record that all the requisite information as required by the Assessing Officer, was furnished b .....

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