The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the speculative losses are not eligible for set off against the non-speculation business income.
The assessee e-filed the return of income declaring a total loss of Rs.25,50,57,463/-. The return of income filed by the assessee was selected for scrutiny and statutory notices were served upon the assessee.
The assessment was completed after disallowing the loss of Rs.26,88,98,500/- on the ground same was not genuine and also being speculative loss. Therefore, the assessee was not eligible for the set-off against non-speculation business income. The Commissioner of Income Tax (Appeal) [CIT(A)] also upheld the disallowances of loss.
Despite notification neither anyone attended on behalf of the assessee nor any request for adjournment was filed. The case has been adjourned on the request of the counsel of the assessee on many occasions. In the circumstances, the appeal was heard ex-parte qua the assessee after hearing the arguments of the Departmental Representative.
The CIT(A) has rejected the claim of the assessee of validity of the speculation loss eligible for set-off against non-speculation profit.
The Two-member bench comprising of Om Prakash Kant (Accountant member) and Kavitha Rajagopal (Judicial member) held that no documentary evidence or explanation has been given by the assessee to controvert the finding of the lower authorities.
The lower authorities have duty observed that the contract for purchase transactions was made within the related parties, no actual payment was made, the debit notes were printed on the letterhead of AMPL and BOL without any identification numbers, transactions were not carried out on any commodity exchange, an agreement was not stamped, etc.
Therefore, the order of the CIT(A) was upheld and the grounds of appeal of the assessee were dismissed.
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