2022 (8) TMI 670

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.... Ground No. 1 raised by the assessee is as under: 1. Learned Commissioner of Income Tax(A) erred in law and on facts in not allowing set off of Brought Forward Unabsorbed Business Losses (Other than Speculation Loss) against the Speculation Business Income of the Current Year amounting to Rs. 12,47,234/- 3. Issue in dispute is regarding claim of set off of unabsorbed business losses of earlier years from the alleged speculative business profits of the impugned year. 4. The facts relating to the present case is that the assessee had earned profits of Rs. 12,47,234/- from intra-day trading of shares, against which it had set off loss of share trading business of earlier years. The same was denied by the AO relying upon the deci....

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....f shall be carried forward to the following assessment year and so on: Provided that where the whole or any part of such loss is sustained in any such business as is referred to in section 33B which is discontinued in the circumstances specified in that section, and, thereafter, at any time before the expiry of the period of three years referred to in that section, such business is re-established, reconstructed or revived by the assessee, so much of the loss as is attributable to such business shall be carried forward to the assessment year relevant to the previous year in which the business is so re-established, reconstructed or revived, and- (a) it shall be set off against the profits and gains, if any, of that business ....

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....categorically held the said income to be speculative in nature. Para 3.1 of the AO's order categorically hold so stating as under: "it was seen in trading account, of relevant assessment year, that the assessee has gained the speculation profit of Rs. 12,47,234/- from intraday trading and this income is also used for set off of the loss of share trading business of earlier years business loss. Whereas as per the provisions of section 43(5) of I T Act, 1961, it is clear that derivatives trading does not come under speculation business loss. Intraday share trading business comes under speculation business whereas, F&O share trading comes under business as per section 43 of the IT Act, 1961." Even the Ld. CIT(A) noted the said ....

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.... business losses against current years speculative business income is held to be in accordance with law. And the AO is directed to allow the same to the assessee. Ground of appeal No. 1 is allowed. 11. The ground no. 2 reads as under: "2. The ld. CIT(A) erred in law and on facts in making additions of Rs. 18,000/- u/s. 68 of the I.T. Act." 12. The issue is relating to the addition of Rs. 18,000/- made to the income of the assessee on account of cash credit from one Shri Chirag Bhikhalal Patel. As is evident from the order of the AO, during the assessment proceedings, inquiry in relation to unsecured loans taken by the assessee amounting in all to Rs. 35,98,244/- was conducted by the AO by issuance of notice under section 133(....