Case Law Details
Souvenir Developers (I) Pvt. Ltd. Vs Union of India (Bombay High Court)
Facts- The appellant is dealing in collection of Toll fees and also carrying business of shares and derivatives. The ROI declaring total income of Rs.85,43,220/- was submitted electronically by assessee on 30th September 2009. The same was processed on 28th March 2011 u/s 143 (1) by accepting the ROI.
Subsequently the case of the appellant was picked up for scrutiny. The statutory notice u/s. 143(2) was issued on 28th September 2010. The appellant produced the information called as per questionnaire before the AO. The AO passed order on 29th December 2011 assessing the income of the appellant as Rs.90,79,092/-.
In the said assessment order, the AO made addition of the income to the extent of Rs.5,35,872/- under three different heads. The AO refused to consider the loss suffered by the assessee on transaction in derivatives while computing net taxable income. The application for rectification under section 154 made by the appellant was rejected by order dated 14th May 2012. On 4th June 2012 the appellant preferred an appeal before the Commissioner of Income Tax (Appeals) against the assessment order. The appellant did not challenge the additions made by the AO.
On 27th February 2014, the CIT (A) passed order refusing to consider the loss suffered by the appellant on transaction in derivatives while computing the net income of the appellant. The CIT(A) was of the view that the appellant would not be entitled to set-off loss suffered from transactions in securities because of the provisions of section 73. The Commissioner held that as provided u/s 73, the loss suffered by the assessee would be a loss from speculative business and as such the appellant would not be entitled to claim setoff against the income from a non-speculative business.
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