2019 (6) TMI 1392

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....he Income Tax Act, 1961; in short "the Act".   2. Ground nos. 1 to 3 in the appeal of the assessee are pertained to upholding and treating the business loss of Rs. 15,69,53,695/- from Future & Options and Rs. 2,46,403/- loss in equity shares as speculation loss by applying explanation to section 73 of Income Tax Act, 1961.  Ground nos. 4 to 6 are pertained to upholding the order of the assessing officer in making disallowance of Rs. 1,62,753/- u/s. 14A.  These grounds of appeal are adjudicated in two categories as under:- Business loss from Future & Option of Rs. 15,69,53,695/- and equity share trading loss of Rs. 2,46,403/- treating as speculation loss   3. During the course of assessment, the assessing o....

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....option through any recognized stock exchange as in the case of the assessee. The assessing officer has not accepted the explanation of the assessee and treated the trading in F & O and shares by the assessee as speculation loss for the purpose of explanation to section 73 of the act and the losses from F & O of Rs. 15,69,53,695/- and loss from share trading amounting to Rs. 2,46,403/- as speculation losses as per explanation to section 73 of the act.  Accordingly, no set off was allowed.    4. Aggrieved assessee has filed appeal before the ld. CIT(A).  The ld. CIT(A)  has dismissed the appeal of the assessee.  5. We have heard the rival contentions and perused the material on record on this issue. &n....

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....as 'speculative loss' and has consequently denied set off of such losses from regular income of non-speculative nature etc. by applying Explanation to Section 73 of the Act. 9.2 We first advert to the pivotal contention on behalf of the assessee that Explanation to Section 73 of the Act cannot apply to loss arising from derivative transactions which are categorically excluded from being regarded as speculative business as defined under s.43(5) of the Act read with proviso (d) thereto. Identical issue arose before the Hon'ble Calcutta High Court in the case of Asian Financial Services (supra) relied upon. The Hon'ble Calcutta High Court held that once it is deemed to be a normal business loss on the basis of proviso ....