TaxTMI 
TaxTMI 
TaxTMI 
2021 (6) TMI 395
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....speculation business) at Nil after setting off profit of Rs. 30,57,397/- against the past years speculative loss and also claim deduction of section 80G amounting to Rs. 33,000. Learned Assessing Officer, however, denied set off speculation loss brought forward from earlier years against the profit in the business of sale shares (speculation business) during the year amounting to Rs. 30,57,397/-, and also disallowed a sum of Rs. 5,04,602/- under section 14A of the Income Tax Act, 1961 (for short "the Act") by applying Rule 8D of the Income Tax Rules1962 ("the Rules") in respect of dividend of income amounting to Rs. 93,018. Learned Assessing Officer, accordingly, concluded the assessment at Rs. 1, 18, 89, 600/- by order dated 20/3/2013 passed under section 143(3) of the Act. 3. Aggrieved by such an order, the assessee preferred an appeal before the Ld. CIT(A) but the Ld. CIT(A) did not agree with the contentions of the assessee and upheld the learned Assessment Order. Hence this appeal by the assessee challenging the denial of the set off of the carry forward speculative loss to the tune of Rs. 30, 57, 397/-and also the addition of Rs. 5, 04, 605/-by invoking 14A of the Act read ....
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....o be of Rs. 11, 09, 271/-and a similar exercise was done in respect of the assessment year 2009-10 also; and that inasmuch as such setting off of the speculative losses from the shares against the income from the derivatives for the earlier assessment years was not justifiable and also because the quantum and nature of brought forward spec relation loss claimed by the assessee was not ascertainable, the authorities are justified in denying the claim of the assessee for setting off of the carried forward speculative losses against the speculative gains of this particular year. Ld. CIT(A) further directed the learned Assessing Officer to take remedial action in respect of the setting off of the speculative losses of the shares business against the gains from the derivatives business. 6. Inreply, Ld. AR submitted that if we accept the contentions raised by the Ld. CIT(A), it would amount that instead of carrying forward the speculative loss to the tune of Rs. 11, 09, 271/-for the assessment year 2008-09 a sum of Rs. 31, 16, 841/- had to be carried forward and it would only increase the quantum of losses. He further submits that, apart from this, the assessment order consequent to the....
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.... of shares within meanings of section 75. However, we find that there is nothing on record to substantiate the factual elements embedded in this proposition and this plea, being taken for the first time at this stage, seems to be a new twist to the assessees case. On the contrary, there is a categorical and uncontroverted finding by the assessing officer that the assessee has sold some shares which were held by it as stock in trade and that the assessee incurred loss ofRs. 1,41,60,772 on such transactions. Our careful perusal of the assessees paper-book also reveals that, as evident from computation of profit/floss) from the business of dealing in shares and securities at page 10 of the paperbook, during the year in appeal, the purchases of securities by the assessee amounted to Rs. 11,41,72,539 and assessees sale of the securities amounted to Rs. 7,46,51,708. It is thus clear that the assessees contention is contrary to the admitted facts on record. Learned counsel for the assessee has also not brought on record any material to substantiate the factual elements embedded in the proposition canvassed by him. 17. We are also of the considered view that even if the loss is only on a....
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....assessee has been treating such type of profit/loss as notional profit/loss for many years and as a matter of fact, after the direction of the Ld. CIT(A) in appeal, learned Assessing Officer had taken a remedialaction by issuing notice under section 148 of the Act but in the orders dated 31/3/2016 for the assessment year 2008-09 and 26/12/2016 for the assessment year 2009-10, learned Assessing Officer did not disturb the earlier assessment in respect of the treatment of the assessee of the profit/loss on account of the business in purchase and sale of shares of other companies.Even if we go by the logic of Ld. CIT(A) in this matter if the speculative profit/loss from the business of shares against the profit/loss from the business in derivatives, for the assessment year 2008-09 it would result only in an enhancement of the loss to be carried forward. 11. In the circumstances, we are of the considered opinion that in view of the consistent accounting policy followed by the assessee, in view of explanation to section 73 of the Act and also the view taken by a coordinate Bench of this Tribunal in the case of Paharpur cooling towers (supra), the assessee is entitled to claim set off o....