Post section 43(5) amendment derivatives losses have to be treated as non-speculation business losses for the purposes of set-off

By TG Team Income Tax Judiciary June 3, 2011

TaxGuru Citation: 2011 taxguru.in 472
Case Name: Gajendra Kumar T Agarwal Vs. ITO (ITAT Mumbai)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2006- 07
Courts: ITAT Mumbai

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Gajendra Kumar T Agarwal Vs. ITO (ITAT Mumbai) –Assessee was eligible for setting of losses of business of dealing in derivatives, incurred in the assessment years prior to the assessment year 2006-07, against the profits of the same business in assessment year 2006-07.

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI G BENCH, MUMBAI

ITA No. 1798/Mum/2010 Assessment year: 2006- 07

Gajendra Kumar T Agarwal Vs. Income Tax Officer

Appearances:

S L Jain, for the appellant Pavan Vaid, for the respondent

O R D E R

Per Pramod Kumar :

1. By way of this appeal, the assessee appellant has called into question correctness of impugned order passed by the learned Commissioner of Income Tax under section 263 of the Income tax Act, 1961, in the matter of assessment under section 143(3) of the Act for the assessment year 2006-07, on the following grounds:

1. The learned CIT erred in holding that the assessment order, as originally passed by the assessing officer under section 143(3), is erroneous and prejudicial to the interest of revenue as in the said assessment order the losses incurred by the assessee have not been correctly carried forward without properly appreciating the facts of the case and law applicable thereto.

2. The learned CIT erred in holding that business income earned by the appellant during the year, in derivatives transactions in shares amounting to Rs 1,91,48,060 be set off against business loss carried forward of Rs 1,95,56,066 for assessment year 2005-06, as against such income being set off against the loss of assessment year 2001-02 incurred by the appellant in derivatives transactions.

3. The learned CIT in not accepting the appellant’s claim that loss incurred by the appellant in earlier years, being in derivatives transactions, be entitled to set off against the income earned in derivatives transactions in assessment year 2006-07, without properly appreciating the facts of the case and law applicable thereto.