Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ----
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    Case LawsIncome Tax
    Reassessing Accommodation Entries: Insights from a High Court Judgment
    Case LawsIncome Tax
    A Judicial Perspective on Section 148A of the Income Tax Act: Amended Reassessment Provisions
    Case LawsCustoms
    Analyzing Legal Principles in a Gold Smuggling Case: The Role of Co-accused Statements and Procedura...
    Case LawsIncome Tax
    Threshold set for monetary limits in filing appeals by Revenue: A policy shift towards reducing liti...
    Case LawsCustoms
    Navigating the Legal Consequences of Goods Misdeclaration in Customs Law
    Upholding Procedural Justice in GST Administration: Adjudication of GST demand u/s 74
    Case LawsIncome Tax
    High Court's Stance on Penalty Notices in Tax Law: A Balance Between Procedure and Justice
    Case LawsIncome Tax
    Decoding the Penalty Provisions under Section 271(1)(c): Analyzing the Fine Line Between Concealment...
    Case LawsIncome Tax
    Levy of penalty under Section 271(1)(c) of the Income Tax Act: Between Legal Intent and Factual Circ...
    Case LawsIndian Laws
    An Analysis of the Natural Justice Principle in Tender Cancellation: A Case Study
    Case LawsIndian Laws
    Principles of Natural Justice and Administrative Action: Balancing Municipal Powers and Citizen Righ...
    Navigating Disclosure and Fair Trial in FEMA Proceedings: A Supreme Court Analysis
    Case LawsCustoms
    Legal Issues in Customs Duty Evasion: Penalties
    Case LawsIncome Tax
    Assessing Penalties for non-filing of ITR: A Deep Dive into Section 271F of the Income Tax Act
    Case LawsIncome Tax
    Addition after survey option as Unaccounted income: Burden to prove and evidence.
    Case LawsIncome Tax
    Decision on Depreciation and Expenditure
    Case LawsIncome Tax
    Navigating Through Reimbursement Expenses, DDT Refunds, and Transfer Pricing Adjustments
    A Judicial Perspective on Locus Standi in Insolvency and Bankruptcy Code Cases
    Navigating Shareholder Rights in Corporate Insolvency: An Analysis of NCLAT’s Decision on the issu...
    Case LawsIncome Tax
    Navigating Financial Distress: A Legal Analysis of Progressive Tax Instalment Judgments
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Case LawsIncome Tax
    Show AI Summary
    Reassessment under Section 148A: disputed factual issues on accommodation entries directed to the assessing officer for factual determination.
    The High Court required detailed scrutiny of alleged accommodation entries and the genuineness of share transactions under the reassessment procedure, noting taxpayers' disclosure of income as Short Term Capital Gains. Applying precedents on judicial review, the court held that disputed factual questions and the procedural validity of reassessment are to be determined by the Assessing Officer rather than in writ proceedings, absent evidence of arbitrariness or limitation breach.
    Case LawsIncome Tax
    Show AI Summary
    Section 148A preliminary enquiry limits inquiry to existence of information before reassessment and preserves assessee procedural rights.
    Preliminary enquiries under the post amendment reassessment procedure require the assessing officer to possess tangible information suggesting escaped income and to afford the assessee an opportunity to respond before issuing a reassessment notice; the officer's inquiry at this stage is limited to ascertaining existence of such information and does not adjudicate the merits, while procedural protections-objection, access to information, and appellate remedies-remain available.
    Case LawsCustoms
    Show AI Summary
    Co accused statements: cannot alone ground smuggling conviction; requires corroboration and procedural compliance to protect presumption of innocence.
    A solitary declaration by a co accused is insufficient to establish participation in a smuggling offence without independent corroborative evidence linking the accused to the seized goods or operation; reliance on such statements without examination and opportunity for cross examination undermines their evidentiary value and contravenes fair trial protections and the presumption of innocence.
    Case LawsIncome Tax
    Show AI Summary
    Monetary limits for appeals reshape Revenue litigation strategy, reducing low stake appeals and encouraging selective prosecution.
    The court treated CBDT instructions on monetary limits as possessing binding effect within the statutory appeals framework, harmonising the right to appeal with monetary limit provisions and applying policy considerations from the National Litigation Policy to limit low stake Revenue appeals; this approach affects Revenue litigation strategy, judicial resource allocation, taxpayer relief, and invites possible legislative clarification regarding retrospective or prospective application.
    Case LawsCustoms
    Show AI Summary
    Misdeclaration of goods: deliberate misstatements attract differential duty, redemption fines and potential confiscation under customs law.
    Misdeclaration of goods in declared quantity and weight violates the statutory declaration regime; an accurate declaration is essential to duty assessment, and material, deliberate discrepancies justify imposition of differential duty, redemption fines and potential confiscation to protect revenue and deter evasion.
    Case LawsGST
    Show AI Summary
    Procedural fairness in GST notices: ensure intimation precedes show cause notice and allow reasonable opportunity to reply.
    The case addresses non-compliance with GST notice procedures where intimation in Form GST DRC-01A and a show cause notice under Section 74(1) were issued simultaneously, depriving the taxpayer of a statutory opportunity to reply. Emphasising procedural fairness and the right to a fair hearing, the court required that the taxpayer be allowed to file a response within a specified timeframe and that further proceedings, including any fresh notice, follow after consideration of that reply.
    Case LawsIncome Tax
    Show AI Summary
    Penalty notice specificity: lack of clarity requires proof of actual prejudice before challenging tax penalties.
    Penalty notices under Section 271(1)(c) read with Section 274 must clearly communicate the specific charge to secure a fair hearing; failure to object during proceedings may constitute acquiescence. Procedural defects do not invalidate penalty proceedings unless the affected party proves actual prejudice, and the burden of demonstrating such prejudice lies with the party alleging breach of natural justice.
    Case LawsIncome Tax
    Show AI Summary
    Furnishing inaccurate particulars cannot be presumed from mere disallowance; defective notices and bona fide claims constrain penalties.
    Penalty for furnishing inaccurate particulars of income requires proof of knowingly misstated or concealed particulars; mere disallowance of a claim does not suffice. A bona fide, arguable claim should not automatically attract penalty, and a defective or unadapted notice that fails to demonstrate application of mind can vitiate penalty proceedings.
    Case LawsIncome Tax
    Show AI Summary
    Furnishing inaccurate particulars: claiming non existent depreciation can attract penalty even without willful concealment; notice must be specific.
    Claiming depreciation on non existent assets constitutes furnishing inaccurate particulars of income under the penalty provision; proof of willful concealment is not a necessary ingredient for civil penalty liability. Notices initiating penalty proceedings must be specific and clear to meet natural justice requirements, and factual admissions and reversal of disputed claims are operative in determining whether inaccurate particulars were furnished.
    Case LawsIndian Laws
    Show AI Summary
    Natural justice in tender cancellations: ensure opportunity to be heard; flexibility applies where no actual prejudice arises.
    Natural justice in tender cancellation requires affected parties be given an opportunity to meet allegations; the case highlights an e tender interrupted by an ex parte inquiry, cancellation without prior notice, and allegations of bias. These procedural deficiencies implicate the audi alteram partem principle and render such cancellations arbitrary where parties are not afforded a fair chance to respond. The analysis notes natural justice is flexible and, in absence of actual prejudice, its breach may not invalidate administrative action, while stressing transparency and balanced procedural fairness by public bodies.
    Case LawsIndian Laws
    Show AI Summary
    Natural justice requires municipal demolition actions to provide adequate notice and a fair hearing before affecting property rights.
    The judgment requires municipal enforcement actions affecting immovable property to rest on clear statutory authority and to respect constitutional property rights, insisting that dispossession or demolition follow lawful procedure. It mandates observance of natural justice, specifically adequate notice and an opportunity to be heard, and embeds these procedural safeguards within principles of transparency, proportionality, and reasoned municipal decision making.
    Case LawsFEMA
    Show AI Summary
    Disclosure obligations ensure accused access to relevant evidence, preserving fair trial rights in FEMA proceedings.
    Disclosure obligations under the Foreign Exchange Management Act require enforcement authorities to furnish accused persons with all relevant documents and evidence to enable preparation of defence, reflecting the right to a fair hearing and natural justice. Investigative confidentiality may justify limited nondisclosure only when authorities demonstrate specific harm, and any withholding must be narrowly tailored, with reasoned determinations that preserve core procedural fairness in FEMA adjudications.
    Case LawsCustoms
    Show AI Summary
    Customs Penalty Jurisdiction affirmed where under invoicing and dual invoicing indicate participation in duty evasion scheme.
    Imposition of penalties under Section 112(a) for alleged under invoicing and dual invoicing was sustained on the basis that receipt of part consideration and issuance of false invoices constituted participation in a scheme to evade customs duty; the offences were treated as occurring within India so the Customs Act applied, co noticee settlements did not extend immunity to others, and a jurisdictional challenge to DRI authority was found inapplicable to the notice issued.
    Case LawsIncome Tax
    Show AI Summary
    Failure to file return on time triggers penalty under Section 271F even if return is later filed after reassessment notice.
    The summary addresses penalty liability for failing to file the original income tax return by the statutory due date, noting that later filing in response to a reassessment notice does not excuse the late original filing. It emphasizes that initiation of penalty proceedings after completion of reassessment does not automatically vitiate the penalty, and that absence of a valid reason for delay sustains penal consequences under the provision for non-filing.
    Case LawsIncome Tax
    Show AI Summary
    Burden to prove unaccounted income: additions require admissible evidence, not assumptions from survey reports.
    Burden to prove alleged unaccounted income lies with the revenue; additions based on survey findings and an Inspector's report to re fix sale prices must be supported by admissible evidence. The taxpayer used the percentage of completion method for construction income, and impounded documents from a statutory survey were central to the dispute. Additions founded mainly on assumptions or inspector notes, without corroborative proof linking seized material to unexplained receipts, are susceptible to appellate review.
    Case LawsIncome Tax
    Show AI Summary
    Depreciation on aircraft recognized when operational preparations precede airworthiness certificate, affecting tax depreciation timing.
    The tribunal treated preparatory expenditures to make a newly acquired aircraft operational as integral to business activity for determining the timing of depreciation, remitted the classification and amortisation of engine improvement and overhaul costs to the assessing officer, allowed component replacement and repair costs as revenue deductions because they did not extend useful life, and confirmed that interest on TDS is not an allowable deduction.
    Case LawsIncome Tax
    Show AI Summary
    Transfer pricing adjustments shape ALP analysis and documentation requirements for royalties and management fees.
    Dispute involves deductibility of cross border reimbursement payments under Section 37 and whether assessing authorities recorded specific factual findings and afforded fair opportunity before disallowance. Related issues include entitlement to refund of excess Dividend Distribution Tax under the DTAA and the correct application of the Arm's Length Principle-notably choice between TNMM and CUP-for benchmarking royalty and management fees, with emphasis on documentation and comparability analysis.
    Case LawsIBC
    Show AI Summary
    Locus standi in insolvency proceedings: standing requires a direct, legitimate interest to initiate or challenge IBC processes.
    The commentary examines locus standi under the Insolvency and Bankruptcy Code, focusing on entitlement to initiate, challenge and participate in the Corporate Insolvency Resolution Process. It highlights procedural interactions among the financial creditor, resolution professional and Committee of Creditors, and discusses contested applications for extension of plan implementation, protection of bank guarantees and permission for fresh bids where a bidder failed to perform. The piece stresses that standing depends on a direct, legitimate interest and that courts apply a stringent interest based test when admitting challenges or procedural relief in IBC proceedings.
    Case LawsIBC
    Show AI Summary
    Shareholder locus standi constrained in insolvency; CoC commercial wisdom insulated from judicial interference absent material illegality.
    Shareholder rights are substantially curtailed after commencement of CIRP: shareholders may file claims in liquidation but lack standing to overturn CoC commercial decisions. The commercial wisdom of the Committee of Creditors is entitled to deference and is reviewable by courts only for material irregularity or legal violation; procedural objections and requests for forensic audit must demonstrate such material illegality to unsettle an approved resolution plan under the IBC.
    Case LawsIncome Tax
    Show AI Summary
    Instalment payments: courts permit flexible tax instalment schedules for financially distressed corporates while respecting lower court discretion.
    The courts endorsed a flexible instalment framework permitting extension and adjustment of tax payment schedules when a corporate taxpayer demonstrates reduced capacity to pay, including temporary reduction of individual instalments with deficits spread over remaining payments. The appellate decision upheld the lower court's discretion, emphasising deference absent clear error and supporting reasonableness and proportionality in accommodating financial distress while preserving eventual recovery of assessed liabilities.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Comparison of Section 113 "Set off and carry forward of losses computed in respect of speculation" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      2 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Section 113 Set off and carry forward of losses computed in respect of speculation business.

      Income-tax Act, 2025

      At a Glance

      Clause 113 (Old Version) of the Income Tax Bill, 2025 sets out the rules for set-off and carry-forward of losses arising from speculation business. It matters because it prescribes the restriction that such losses are to be absorbed only against profits from speculation business and provides a four-year carry-forward limit, affecting taxpayers engaged in speculative trading (including certain companies trading in shares). Effective date or decision date: Not stated in the document.

      Background & Scope

      Statutory hooks: Clause 113 of the Income Tax Bill, 2025 (Old Version). The provision addresses the treatment of "speculation business" losses for set-off and carry-forward purposes. Definitions and explanatory notes within the text: sub-section (5)(a) contains a deeming provision for companies engaged in purchase and sale of shares of other companies; sub-section (5)(b) defines "unabsorbed speculation business loss."

      Coverage: applies to losses computed in respect of a speculation business carried on by the assessee during a tax year and to companies captured by the deeming provision, subject to carve-outs in sub-section (6).

      Statutory Provision Mode

      Text & Scope

      The clause comprises six sub-sections. Key elements are:

      • Sub-sec (1): Any loss computed from a speculation business carried on by the assessee during any tax year shall be set off only against profits and gains, if any, of another speculation business for that tax year.
      • Sub-sec (2): The "unabsorbed speculation business loss" for any tax year shall be carried forward to the subsequent year and set off only against profits/gains of speculation business in that subsequent year, and iteratively thereafter.
      • Sub-sec (3): Carry-forward is limited to four tax years immediately succeeding the year in which the loss was first computed.
      • Sub-sec (4): The unabsorbed speculation loss shall be allowed to be set off before set-off of any carried forward allowance u/s 33(11) or 45(7).
      • Sub-sec (5)(a): A company whose business partly consists of purchase and sale of shares of other companies shall be deemed to carry on speculation business to that extent; sub-sec (5)(b) defines "unabsorbed speculation business loss."
      • Sub-sec (6): Carve-outs: the deeming in (5)(a) does not apply if the company's gross total income mainly consists of income under "Income from house property", "Capital gains", or "Income from other sources", or if its principal business is trading in shares, banking, or granting loans/advances.

      Interpretation

      The clause expresses a clear legislative intent to ring-fence speculation business losses: they are to be absorbed only against similar profits and are not available for general set-off against other heads of income. The temporal limitation of four years indicates a policy choice to provide limited relief while preventing indefinite carry-forward of speculative losses. The explicit priority rule in sub-sec (4) manifests an interpretive principle that unabsorbed speculation losses should be exhausted before other carried-forward allowances related to speculation business.

      Exceptions/Provisos

      Carve-outs are confined to the deeming provision in sub-sec (5)(a). Where a company's gross total income mainly arises from specified heads, or where its principal business is trading in shares/banking/loans and advances, the deeming to speculation business does not apply. No other exceptions or provisos are stated in the document.

      Illustrations

      • Example 1: A sole proprietor undertakes intraday trading deemed speculation business and incurs a loss of Rs. 10 lakh in Year 1. That loss can be set off only against profits from speculation business in Year 1; any unabsorbed portion is carried forward up to four subsequent years to be set off only against speculation profits. (Numbers and factual posture consistent with clause language.)
      • Example 2: A company A whose primary business is manufacturing but that also buys and sells shares of other companies incurs a speculation loss to the extent of its share trading activity. That loss is an "unabsorbed speculation business loss" and is set off/carried forward per the clause unless the carve-outs in (6) apply. (Specific quantum and sequence follow the clause.)

      Interplay

      The clause expressly interacts with sections 33(11) and 45(7) by prioritising set-off of unabsorbed speculation business loss ahead of carried-forward allowances under those sections. No other statutory rules, notifications, or circulars are mentioned in the text. Any further statutory interplay is Not stated in the document.

      Differences Between the Two Provisions and Practical Impact

      • Terminology: The Act (Section 113) uses the phrase "loss, computed in respect of a speculation business" while the Bill (Clause 113, Old Version) consistently uses "unabsorbed speculation business loss" and defines that term in sub-section (5)(b).
        • Practical impact: The Bill's express definition clarifies the concept of unabsorbed loss for drafting and interpretation; the Act version omits that explicit definition, which may lead to reliance on ordinary meaning or other provisions for interpretive clarity.
      • Sequence and phrasing of carry-forward rule: The Act sets out (1) set-off only against other speculation business profits; (2) carry-forward where loss cannot be wholly set off, with iterative application; (3) four-year limitation. The Bill states these same rules but frames sub-section (2) as carrying forward "unabsorbed speculation business loss" to the subsequent year and repeating.
        • Practical impact: Substantive carry-forward and limitation periods appear the same; the Bill's language is marginally more explicit in naming the unabsorbed loss as the subject of carry-forward, aiding clarity for compliance and assessment.
      • Priority vis-`a-vis other carried forward allowances: The Act (sub-sec (4)) states "effect shall first be given to the provision of this section" where any allowance u/s 33(11) or s.45(7) related to speculation business is to be carried forward. The Bill (sub-sec (4)) states the unabsorbed speculation business loss "shall first be allowed to be set off before allowing set off of any carried forward allowance u/s 33(11) or 45(7)."
        • Practical impact: The Bill more clearly prescribes the order of set-off-explicitly prioritising speculation loss over carried-forward allowances-reducing interpretive dispute about sequencing; the Act's phrasing is similar but less prescriptive in form.
      • Definition deeming companies to carry on speculation business: Both texts have sub-section (5)(a) deeming a company that purchases and sells shares of other companies to be carrying on speculation business to that extent. The Bill places this within a broader sub-section (5) that also contains the definition of "unabsorbed speculation business loss" in (5)(b); the Act has (5) as the deeming clause only.
        • Practical impact: The Bill consolidates definitional material under one sub-section, improving textual structure and user comprehension.
      • Non-application exceptions: Both texts contain identical carve-outs in sub-sec (6) exempting the deeming rule for companies whose gross total income consists mainly of certain heads or whose principal business is trading in shares/banking/loaning.
        • Practical impact: No substantive change here.
      • Stylistic and drafting differences: The Bill uses the phrase "during any tax year" and "for the said tax year" in sub-sec (1), and more repetitive phrasing in sub-sec (2). The Act is more succinct.
        • Practical impact: Drafting style changes in the Bill provide marginally more explicit temporal markers and an express definitional provision, aiding textual clarity but not altering substantive effect.

      Practical Implications

      • Compliance and risk areas: Taxpayers engaged in trading activities must identify whether their activities constitute "speculation business" and compute losses accordingly, because such losses have restricted set-off availability and a limited carry-forward window. Misclassification may lead to disallowance of broader set-off claims. The Bill's express definition of "unabsorbed speculation business loss" reduces interpretive risk when determining carry-forward subjects.
      • Record-keeping/evidence points: Taxpayers should maintain contemporaneous records segregating speculative trading profits/losses from other business incomes, and documents supporting the nature and extent of share trading where companies have mixed businesses, so as to establish the extent to which the deeming clause applies or does not apply under the carve-outs in sub-sec (6). The clause itself does not prescribe forms or specific documentary thresholds. (Procedures/forms: Not stated in the document.)

      Key Takeaways

      • The Bill ring-fences speculation business losses: set-off permitted only against speculation business profits.
      • Unabsorbed speculation business losses can be carried forward for up to four subsequent tax years only.
      • Unabsorbed speculation losses must be set off before carried-forward allowances u/s 33(11) or s.45(7).
      • Companies that purchase and sell shares of other companies are deemed to carry on speculation business to that extent, subject to carve-outs.
      • Carve-outs exclude the deeming rule where gross total income mainly consists of certain heads or where the company's principal business is share trading, banking, or lending.
      • The Bill's drafting provides greater definitional clarity (term "unabsorbed speculation business loss") and sequencing language than the Act version, improving interpretive certainty without altering substantive effect materially.

      Full Text:

      Section 113 Set off and carry forward of losses computed in respect of speculation business.

      Topics

      ActsIncome Tax