Dismissing the appeal of the revenue the Tribunal held that ;loss incurred on account of derivatives would be deemed business loss under proviso to S. 43(5) and not speculation loss and, accordingly Explanation to S. 73 could not be applied and as such, loss would be set off against income from business. When two non jurisdictional High Courts have taken different view , view in favour of the assessee may be followed . (Referred ,Taj International ( P) Ltd v. Dy. CIT ( 2011) 118 Taxman 59 (Mag) (Delhi ) ( HC) , Asian Financial Services Ltd v. CIT ( 2016) 240 Taxman 192 ( Cal) (HC) ) favour , CIT v. DLF Commercial Developers Ltd ( 2013) 218 Taxman 45 ( Delhi) (HC) against ) ( AY.2011-12)
ITO v. Upkar Retail (P.) Ltd. (2018) 171 ITD 626/ 170 DTR 233 /195 TTJ 743 (Ahd) (Trib.)
S. 43(5) : Speculative transaction – Derivatives – Losses – Set off from one source against income from other source under same head of income- Loss incurred on account of derivatives would be deemed business loss under proviso to S. 43(5) and not speculation loss, Explanation to S. 73 would not be applicable- Interpretation- Two non jurisdictional High Court taking different view-View favourable to the assessee is followed . [ S.70, 73(4) ]