PR. COMMISSIONER OF INCOME TAX, BIKANER vs. M/S GANPATI INFOLINE PVT. LTD.

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ITA/25/2018HC Rajasthan2025:RJ-JD:37730-DB22 August 2025Bench: K.R. SHRIRAM, SANDEEP TANEJA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court re-framed the substantial question of law to focus on whether the Tribunal erred in allowing loss in non-speculative business to be set off against income from speculative business, considering the limitations under Sections 70, 72, and 73. The Tribunal, relying on the ITAT Lucknow decision in Ramshree Steels (P) Ltd. Vs. Income Tax Officer and the Allahabad High Court's confirmation in Commissioner of Income Tax Vs. Ramshree Steels (P) Ltd., held in favour of the assessee. The Allahabad High Court had concluded that brought forward and current business loss of non-speculative business is liable to be set off against current profits of speculative business. The Rajasthan High Court respectfully agreed with the findings of the Allahabad High Court. Therefore, the substantial question of law was answered in favour of the assessee, and the ITAT's conclusion was upheld. The appeal was dismissed.

What were the facts?

The appeal was filed by the Principal Commissioner of Income Tax, Bikaner (Revenue) against the order of the Income Tax Appellate Tribunal (ITAT). The assessment year(s) are not explicitly stated. The ITAT had confirmed the deletion of an addition of Rs. 6,43,43,300 made by the Assessing Officer (AO). This addition was related to an income surrender of Rs. 8,00,00,000 made by M/s Ganpati Infoline Pvt. Ltd. (Assessee) during survey proceedings under Section 133A, where the assessee allegedly failed to produce original evidence for physical delivery-based transactions. The procedural history involves the AO making the addition, the CIT(A) deleting it, and the ITAT confirming the deletion. The High Court re-framed the substantial question of law.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is legally correct in confirming the order of the CIT(A) who deleted the addition of Rs. 6,43,43,300/-, made by the AO by ignoring the fact that the assessee itself surrendered income of Rs. 8,00,00,000/- during the course of survey proceedings u/s 133A and no original evidence regarding entering into physical delivery based transactions was produced by assessee during assessment proceedings? (Question of mixed law and fact, concerning Section 133A and assessment proceedings). 2. Whether the Tribunal was in error in allowing loss in non-speculative business to be set off from income of speculative business without appreciating that set off of loss against income is governed by and limited to provisions of ss.72 and 73 in particular and ss. 70 to 80 in general which do not provide for set off loss of non-speculative business against income from speculative business. (Question of law, concerning Sections 70, 72, and 73). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue argued that the ITAT was legally incorrect in confirming the deletion of the addition, especially considering the assessee's surrender of income during survey proceedings and the alleged lack of evidence for physical delivery-based transactions. The revenue also contended that loss from non-speculative business cannot be set off against income from speculative business, citing Sections 70, 72, and 73 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 133A,Section 70,Section 72,Section 73

AI-generated summary — verify with the full judgment below

[2025:RJ-JD:37730-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 25/2018 Pr. Commissioner Of Income Tax, Bikaner. ----Appellant Versus M/s Ganpati Infoline Pvt. Ltd., 37-K Block, Sriganganagar Rajasthan. ----Respondent For Appellant : Mr. K.K. Bissa, Advocate For Respondent : Mr. Anjay Kothari, Advocate HON'BLE THE CHIEF JUSTICE MR. K.R. SHRIRAM HON'BLE MR. JUSTICE SANDEEP TANEJA Order 22/08/2025 1. On 26th February 2018 following substantial question of law was framed:- “1. Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is legally correct in confirming the order of the CIT(A) who deleted the addition of Rs.6,43,43,300/-, made by the AO by ignoring the fact that the assessee itself surrendered income of Rs.8,00,00,000/- during the course of survey proceedings u/s 133A and no original evidence regarding entering into physical delivery based transactions was produced by assessee during assessment proceedings?” 2. After we heard both counsels, we felt that question of law has to be re-framed. The only question of law, as framed earlier, is re-framed as under:- “ Whether the Tribunal was in error in allowing loss in non-speculative business to be set off from income of speculative business without appreciating that set off of loss against income is governed by and limited to provisions of ss.72 and 73 in particular and ss. 70 to 80 in general which do not provide for set off loss of non- speculative business against income from speculative business.” (Uploaded on 22/08/2025 at 03:06:17 PM) (Downloaded on 27/10/2026 at 11:15:49 PM)

[2025:RJ-JD:37730-DB] (2 of 2) [ITA-25/2018] 3. The ITAT relying upon a judgment of ITAT, Lucknow in Ramshree Steels (P) Ltd. Vs. Income Tax Officer1 decided in favour of assessee by holding that addition made by assessing officer was correctly deleted by Commissioner (Appeals). This finding of ITAT, Lucknow has been confirmed by a Division Bench of High Court of Allahabad in Commissioner of Income Tax Vs. Ramshree Steels (P) Ltd.2, where Hon’ble High Court was pleased to conclude that brought forward and current business loss of non-speculative business is liable to be set off against current profits of speculative business. 4. We respectfully agree with the findings of Allahabad High Court. 5. In the circumstances, the substantial question of law is answered in favour of assessee and we hold that ITAT was correct in its conclusion. 6. Therefore, appeal dismissed. (SANDEEP TANEJA),J (K.R. SHRIRAM),CJ 30-pooja/- 1 (2013) 158 TTJ (Lucknow) 627 2 (2018) 400 ITR 61 (All) Powered by TCPDF (www.tcpdf.org) (Uploaded on 22/08/2025 at 03:06:17 PM) (Downloaded on 27/10/2026 at 11:15:49 PM)

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