GEETA ARVIND HARIA, MUMBAI V. ITO WD 26(1) (1) , MUMBAI

ITA 2236/MUM/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1772 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 30-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Transactions in derivatives
• Section: 43(5); 250; 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE HON'BLE SHRI SANJAY GARG, JUDICIAL MEMBER ITA No. 2236/Mum/2021 (Assessment Year 2015-16) Ge e ta A r vin d Ha r ia 1 8 6 /1 6 , S h rin i wa s 2 n d F lo o r , V .P . Cro s s Ro a d , Mu lu n d (W ) Mu m b a i-4 0 0 0 8 0 Vs. The ITO Ward 26(1)(1), Room No. 303, 3 rd Floor, Kautilya Bhavan, C-41 to C-43, G-Block, BKC, Bandra (East), Mumbai-400 051 (Appellant) (Respondent) PAN No. AAAPH2574C Assessee by : None Revenue by : Shri Anil Gupta, DR Date of hearing: 19.05.2022 Date of pronouncement : 19.05.2022 O R D E R 01. The present appeal has been preferred by the assessee against the order dated 10.11.2021 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’). 02. The assessee in this appeal has taken the following grounds of appeal: “The appellant submits the following grounds: 1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in confirming the denial of set-off of Page | 2 ITA No. 2236/Mum/2021 Geeta Arvind Hariya; A.Y. 15-16 losses amounting to 7,34,243 incurred from trading in derivatives against the other business income and income from other sources. 2. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in treating the losses amounting to 7,34,243 incurred from trading in derivatives as speculation losses by relying upon the decision of Delhi High Court in the case of CIT vs. DLF Commercial Developers Ltd. without appreciating that Explanation to Section 73 is not applicable to the appellant as she is an individual assessee and not a company.” 03. In this case, the assessee has been denied the set off of losses amounting to ₹7,34,243/- incurred from trading in derivatives as against the business loss and income from other sources. The plea of the assessee is that since the transactions were carried out at recognized stock exchange, the assessee is entitled to set off of losses in transactions in derivatives against business income and other income. The lower authorities have relied upon the explanation of Section 73 of the Act in treating the transaction in derivatives of the assessee as speculation business and thereby denied the set off of losses. 04. No one has put in appearance on behalf of assessee despite notice, therefore, I proceed to decide the appeal after hearing the learned Departmental Representative and going through the records. Page | 3 ITA No. 2236/Mum/2021 Geeta Arvind Hariya; A.Y. 15-16 05. The learned Departmental Representative has been fair enough to submit that the explanation to Section 73 of the Act applies to the companies and not to an individual. The transactions in derivatives are otherwise covered under section 43(5) of the Act, and accordingly, the assessee is entitled to set off of losses from transactions in derivatives done on recognized stock exchange. 06. Accordingly, the disallowance made by the lower authorities is ordered to be deleted. 07. In the Result, the appeal of the assessee stands allowed. Order pronounced in the open court on 19.05.2022. Sd/-/- (SANJAY GARG) (JUDICIAL MEMBER) Mumbai, Dated: 19.05.2022 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai