2015 (1) TMI 247

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.... For the assessment year 1997-98, the appellant filed returns showing loss of Rs. 29,71,990/-. The Assessing Officer gave an intimation making prima facie adjustment under Section 143(1)(a) of the Act. On the one hand, the loss of Rs. 29,71,990/- was ignored and on the other hand, the assessee was shown to be having income of Rs. 53,37,168/-. Aggrieved thereby, the appellant filed an appeal before the Commissioner of Income Tax. The appeal was allowed and the matter was remanded to the Assessing officer to undertake an exercise under Sub-Sections (2) and (3) of Section 143 of the Act. After remand, the appellant filed revised returns, posting the same loss but with certain different calculations. The Assessing Officer passed an order determ....

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.... for the respondent submits that the circumstances, under which a company can be treated as carrying on speculation business are furnished in detail in the explanation to Section 73 of the Act and on the undisputed facts, the appellant falls into that category. He submits that it makes little difference, whether the so called loss posted by the company attracted by Section 73 of the Act on account of sale of shares or the fall in value thereof. According to the learned counsel, no amount representing the loss of a company through a business of such activity would qualify for set off against the other non-speculative income. The Act creates several facilities for deduction mostly in the form of losses from the income earned by that very a....

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....ion business as they apply in relation to any other business. (4) No loss shall be carried forward under this section for more than four assessment years immediately succeeding the assessment year for which the loss was first computed. From this, it becomes clear that any loss, which an assessee is said to have incurred in respect of a speculation business, cannot be set off against the profits and gains from other activities. The only exception is that the loss of such nature can be posted against the income earned from another speculative activity. The circumstances, under which a company can be treated as the one carrying on speculation business, are enumerated in the Explanation. In a way, it can be said that any company, which....