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ITAT allowed the assessee's appeal on multiple grounds....

Commodity transactions with actual delivery qualify as business losses not speculative under Section 43(5)

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Income Tax June 26, 2025 Case Laws AT
ITAT allowed the assessee's appeal on multiple grounds. Regarding speculative transaction losses, the tribunal held that commodity transactions were not conducted on NSEL platform and involved actual delivery with proper documentation, thus qualifying as business losses rather than speculative losses under Section 43(5). The AO's disallowance based solely on transactions with specific parties was deemed unacceptable. For futures and options losses, ITAT ruled these constituted legitimate hedging activities for the manufacturing business, not speculative transactions. Additional depreciation disallowance was reversed, following Godrej Industries Ltd precedent that balance depreciation benefit can be claimed in subsequent assessment years. Prior period income addition was allowed after verification of revised computation and tax payment. Purchase disallowances were deleted as NSEL confirmed peer-to-peer transactions with proper banking channel payments for cotton wash oil and mustard seeds.

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Acts Income Tax