section 43

Contribution to Provident Fund- Tax ability- Employer’s View

Income Tax - According to section 36(1)(iv) any sum paid by the assessee as an employer by way of contribution towards a recognized provident fund shall be allowed as a deduction in computing the income referred to in section 28 (income under PGBP)....

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Recent drop in Ruppee Value gives rise in tax depreciation -Relevant provisions of Section 43A

Income Tax - On the question whether an Assessee is entitled to adjust the actual cost of imported assets acquired in foreign currency on account of fluctuation in the rate of exchange at the time of making PAYMENT towards the whole or part of cost of the asset or towards repayment of whole or a part of the moneys borrowed by him from any person direc...

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SB rules income from derivative trading in shares prior to financial year 2005-06 is speculation income

Income Tax - This Tax Alert summarizes a recent ruling of the Special Bench (SB) of Kolkata Income Tax Appellate Tribunal (ITAT) in the case of Shree Capital Services Ltd. (Taxpayer) vs. ACIT (ITA No. 1294 (Kol) of 2008) in which the SB held that, prior to financial year 2005-06 (assessment year 2006-07), derivative transactions in shares were covered...

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Derivative transactions prior to amendment in section 43(5) (effective from AY 2006-07) are speculative transaction

Income Tax - Recently, the Special Bench of the Kolkata Income-tax Appellate Tribunal (the Tribunal) in the case of Shree Capital Services Ltd. v. ACIT (2009-TIOL-542-ITAT-KOL-SB) while dealing with a case prior to the amendment to section 43(5) of the Income-tax Act, 1961 (the Act) exempting derivative transaction as speculative in nature, held that ...

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Even if Income is exempt Assessee need to adjust written down value of fixed Assets with depreciation as per Income tax Act, 1961

Income Tax - Some persons were exempt from tax and, therefore, not required to compute their income under the head “profits and gains of business or profession”. Upon withdrawal of exemption, such persons became liable to income-tax and hence were required to compute their income for income-tax purposes. In this context, dispute has arisen regardi...

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Section 43(5)(d) applicable only on derivatives trading (future & options) and not on share trading

ACE India Medical Systems Vs ACIT (ITAT Jaipur) - In the case of ACE India Medical Systems Vs. ACIT Jaipur Bench of ITAT held that from the bare reading of the section 43 (5) (d) it is prima facie clear that Section 43(5)(d) is for trading in derivatives not trading of shares....

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Loss from Forex Derivative trading upto export turnover is business loss & not speculative loss

M/s. Majestic Exports Vs JCIT (ITAT Chennai) - In the case of M/s. Majestic Exports vs. JCIT, ITAT Chennai held that the loss in the transactions of the forex derivatives contracts will be considered to be the business loss and the same can be set off against the business income. ...

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Is Loss from derivative trading is a speculation loss & can it be set-off against normal business profits

ITO Vs Emperor International Ltd (ITAT Delhi) - In the present case, it is an admitted fact that the assessee was engaged in the business of dealing in shares & securities and has incurred loss from dealing in derivatives (shares futures). It is not the case of the AO that the share futures in which the assessee was dealing were not recorded in r...

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Jobbing is not speculative in view of proviso(c) to section 43(5)

Commissioner Income Tax Vs Sri Ram Kishan Gupta (Allahabad High Court) - This proviso makes it very clear that any profit or loss on account of jobbing will not be in the nature of speculation profit or speculation loss. Thus, even if it is accepted that the loss suffered by the appellant was on account of self-trading in view of proviso (c) to section 43(5) such loss ca...

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FII cannot have business profits – Derivatives income not taxable as speculation income to FIIs

Platinum Asset Management Ltd. Vs Dy. Director of Income Tax (ITAT Mumbai) - In view of above order and respectfully following the decision of Co-ordinate Bench of the Tribunal (supra), we decide Ground No.2 of the appeal in favour of assessee. Accordingly, we hold that the income arising from transaction in derivative by assessee(s), being sub-account FII cannot be treated ...

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CBDT notifies Ace Derivatives and Commodity Exchange Ltd.’ for trading of commodity derivative U/s. 43(5)

Notification No. 15/2014-Income Tax - (20/03/2014) - Notification No. 15/2014-Income Tax entral Government hereby notifies the Ace Derivatives and Commodity Exchange Limited, Ahmedabad as a recognised association for the purposes of clause (e) of the proviso to clause (5) of the section 43(5), with effect from the date of publication of this notificat...

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Recent Posts in "section 43"

Contribution to Provident Fund- Tax ability- Employer’s View

According to section 36(1)(iv) any sum paid by the assessee as an employer by way of contribution towards a recognized provident fund shall be allowed as a deduction in computing the income referred to in section 28 (income under PGBP)....

Read More
Posted Under: Income Tax |

Section 43(5)(d) applicable only on derivatives trading (future & options) and not on share trading

ACE India Medical Systems Vs ACIT (ITAT Jaipur)

In the case of ACE India Medical Systems Vs. ACIT Jaipur Bench of ITAT held that from the bare reading of the section 43 (5) (d) it is prima facie clear that Section 43(5)(d) is for trading in derivatives not trading of shares....

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Loss from Forex Derivative trading upto export turnover is business loss & not speculative loss

M/s. Majestic Exports Vs JCIT (ITAT Chennai)

In the case of M/s. Majestic Exports vs. JCIT, ITAT Chennai held that the loss in the transactions of the forex derivatives contracts will be considered to be the business loss and the same can be set off against the business income. ...

Read More

Is Loss from derivative trading is a speculation loss & can it be set-off against normal business profits

ITO Vs Emperor International Ltd (ITAT Delhi)

In the present case, it is an admitted fact that the assessee was engaged in the business of dealing in shares & securities and has incurred loss from dealing in derivatives (shares futures). It is not the case of the AO that the share futures in which the assessee was dealing were not recorded in recognized Stock Exchange, the loss incur...

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CBDT notifies Ace Derivatives and Commodity Exchange Ltd.’ for trading of commodity derivative U/s. 43(5)

Notification No. 15/2014-Income Tax (20/03/2014)

Notification No. 15/2014-Income Tax entral Government hereby notifies the Ace Derivatives and Commodity Exchange Limited, Ahmedabad as a recognised association for the purposes of clause (e) of the proviso to clause (5) of the section 43(5), with effect from the date of publication of this notification in the Official Gazette. ...

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Jobbing is not speculative in view of proviso(c) to section 43(5)

Commissioner Income Tax Vs Sri Ram Kishan Gupta (Allahabad High Court)

This proviso makes it very clear that any profit or loss on account of jobbing will not be in the nature of speculation profit or speculation loss. Thus, even if it is accepted that the loss suffered by the appellant was on account of self-trading in view of proviso (c) to section 43(5) such loss cannot be treated as speculation loss....

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FII cannot have business profits – Derivatives income not taxable as speculation income to FIIs

Platinum Asset Management Ltd. Vs Dy. Director of Income Tax (ITAT Mumbai)

In view of above order and respectfully following the decision of Co-ordinate Bench of the Tribunal (supra), we decide Ground No.2 of the appeal in favour of assessee. Accordingly, we hold that the income arising from transaction in derivative by assessee(s), being sub-account FII cannot be treated as business profit or loss....

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Despite Section 43(5) Exemption, Derivatives Loss Is Speculation Loss For Companies

The Commissioner of Income Tax Delhi-IV Vs DLF Commercial Developers Limited (Delhi High Court)

Did the Income Tax Appellate Tribunal (ITAT) fall into error in not holding that the loss of Rs. 4,92,71,000/- on account of derivative transaction was a speculative loss, and was entitled to the benefit of Section 73, in view of the Explanation to Section 73 of the Income Tax Act...

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Recent drop in Ruppee Value gives rise in tax depreciation -Relevant provisions of Section 43A

On the question whether an Assessee is entitled to adjust the actual cost of imported assets acquired in foreign currency on account of fluctuation in the rate of exchange at the time of making PAYMENT towards the whole or part of cost of the asset or towards repayment of whole or a part of the moneys borrowed by him from any person direc...

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Posted Under: Income Tax |

Foreign Currency Forward Contract Loss is not Speculation Loss

Commissioner of Income Tax III Vs Panchmahal Steel Ltd (Gujarat High court at Ahmedabad)

Learned counsel for the Revenue stated that said decision of this Court was not carried in appeal on the ground that it involved tax effect lower than what is prescribed by the CBDT in circular dated 9.2.2011 permitting the Revenue to carry such appeal before the Supreme Court. Counsel for the Revenue was unable to point out any factual d...

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