The assessee had a loss of Rs.1,68,674/-from the sale of shares. It also had a dividend income of Rs.31,93,299/-. The expenditure was set off against the income from business for the year, there was a total loss of Rs.3,19,13,970/-. The assessee also had income from other sources at Rs.7,98,850/-, which was by way of refund of income tax for the earlier years. The assessee claimed that the business loss which arose in this particular year could be set off against the income from other sources. Allowing the appeal of the revenue the Court held that where the assessees carried on speculative business, like dealing in shares, when suffered losses, the claim of set off against the income from sources other than the profits and gains of business or profession, was found to be not permissible going by S.73. S. 73 culls out a particular type of business loss out of S.72 and places it u/s.73, being one occasioned by a speculative business. (AY. 2003-04)
CIT v. Harrisons Malayalam Financial Services Ltd. (2019) 176 DTR 145 (Ker.)(HC)
S. 73 : Losses in speculation business–Non-banking company– losses can only be set off against speculative business income unless the gross total income of the assessee is under heads of income, other than income from profits and gains of business or profession. Loss in speculative business is allowed to be carried forward. [S. 72]