Appeals Dismissed for Delay; Remand for Fresh Adjudication

The appeals regarding the condonation of delay (ITA Nos.1680 to 1684/PUN/2018) were dismissed as time-barred. The other appeals (ITA Nos.1675 to 1679/PUN/2018) were allowed for statistical purposes and remanded to the CIT(A) for fresh adjudication following the Tribunal's decision in the Madhuri Kotecha case. The order was pronounced on February 13, 2020.

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Issues Involved:
1. Condonation of Delay in Filing Appeals
2. Nature of Losses as Speculative or Business Losses

Issue-Wise Detailed Analysis:

Condonation of Delay in Filing Appeals:

The preliminary issue addressed was the condonation of a delay of 884 days in filing appeals against the revision orders passed by the Pr.CIT. The assessee's counsel argued that the delay was due to reliance on a favorable order from the CIT(A) for the assessment year 2006-07, which allowed the loss claim as a business loss. However, the Tribunal found the reasons for the delay unconvincing, noting that the assessee should have filed the appeal in a timely manner given the adverse revision order. The Tribunal referenced the judgment of the Hon’ble Bombay High Court in the case of Kolte Patil Developers Ltd., which was directly applicable. Consequently, the delay was not condoned, and the appeals in ITA Nos.1680 to 1684/PUN/2018 were dismissed as time-barred.

Nature of Losses as Speculative or Business Losses:

The main issue in the remaining appeals (ITA Nos. 1675 to 1679/PUN/2018) was whether the losses incurred from Futures and Options (F&O) trading were speculative losses or business losses in light of the amended provisions of section 43(5)(d) of the Act. The assessee argued that similar issues had been adjudicated in favor of the assessee in the case of Madhuri Kotecha vs. ACIT. The Tribunal in that case had concluded that losses from F&O trading activities were business losses, not speculative losses, due to the retrospective amendment of section 43(5)(d).

The Pr.CIT had directed the Assessing Officer to treat the losses as speculative, which the CIT(A) upheld without adjudicating on the merits, merely following the Pr.CIT’s directions. The Tribunal found that the CIT(A) erred in not deciding the issue on merits and directed the CIT(A) to comply with the Tribunal’s order in the Madhuri Kotecha case, which treated such losses as business losses. Therefore, the appeals were remanded to the CIT(A) for fresh adjudication, with instructions to consider the comparability of facts with the Madhuri Kotecha case.

Conclusion:

The appeals concerning the condonation of delay (ITA Nos.1680 to 1684/PUN/2018) were dismissed as time-barred. The remaining appeals (ITA Nos.1675 to 1679/PUN/2018) were allowed for statistical purposes and remanded to the CIT(A) for fresh adjudication in line with the Tribunal’s decision in the Madhuri Kotecha case.

Order Pronounced:
The order was pronounced on February 13, 2020.

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