Case Law Details
Snowtex Investment Limited Vs Pr. CIT (Supreme Court)
Conclusion: Loss occurred to assessee as a result of its activity of trading in shares (a loss arising from the business of speculation) was not capable of being set off against the profits which it had earned against the business of futures and options since the latter did not constitute profits and gains of a speculative business.
Held:
Assessee was trading in shares and securities having loss from share trading which was held to be a speculation loss. AO held that in view of the provisions of Section 43(5)(d), activities pertaining to futures and options could not be treated as speculative transactions.The loss from speculation was held not to be capable of being set off against the profits from business. It was held the amendment which was brought by Parliament to the Explanation to Section 73 by the Finance (No 2) Act 2014 was with effect from 1 April 2015. In its legislative wisdom, the Parliament amended Section 43(5) with effect from 1 April 2006 in relation to the business of trading in derivatives, Parliament brought about a specific amendment in the Explanation to Section 73, insofar as trading in shares was concerned, with effect from 1 April 2015. The latter amendment was intended to take effect from the date stipulated by Parliament and there was no reason to hold either that it was clarificatory or that the intent of Parliament was to give it retrospective effect. The consequence was that in A.Y. 2008-2009, the loss which occurred to assessee as a result of its activity of trading in shares (a loss arising from the business of speculation) was not capable of being set off against the profits which it had earned against the business of futures and options since the latter did not constitute profits and gains of a speculative business.
FULL TEXT OF THE SUPREME COURT JUDGMENT
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