WEISSER TRADING COMPANY PVT. LTD.,MUMBAI vs. DCIT - 1(3)(2), MUMBAI

The assessee has raised the following grounds of appeal: -

The learned counsel for the assessee at the outset submitted that the issue in the appeal on merit is decided in favour of the assessee in the subsequent assessment year, i.e. A.Y. 2013-14 by the Coordinate Bench in vide order dated 18.01.2018. Referring to the said order the learned counsel submitted that the Tribunal has held that loss in trading of currency derivatives of recognized Stock Exchange is not speculative loss. The learned counsel also submitted that while coming to such a conclusion the Tribunal referred to the decision of the Coordinate Bench in the case of IVF Advisors P. Ltd. (39 ITR (Trib) 541 (Mum). Therefore, the learned counsel submitted that in view of this decision the loss on currency derivatives should be treated as speculative loss as done by the AO.

The learned D.R. submitted that in the original return of income the assessee has claimed loss on currency derivatives as speculative loss. However, a revised return of income was filed which is beyond the time limit and in the revised return the assessee has claimed such loss as business loss and not speculative loss. The learned D.R. submitted that since the assessee has filed the return belatedly, the loss claimed by the assessee cannot be allowed to be set off.

The learned counsel for the assessee, referring to the decision of the Mumbai Bench of the Tribunal in the case of Ramesh R. Shah (143 TTJ (Mum) 166), submitted that even if the assessee files revised return belatedly, since the original return was filed in time under Section 139(1) of the Income Tax Act, 1961 (hereinafter “the Act”) claim of the assessee cannot be denied. The learned counsel submitted that in the case of Ramesh R. Shah (supra) there was a positive income when the return was filed under Section 139(1) of the Act and a revised return was filed claiming loss within the time specified under Section 139(5) of the Act and therefore it was held that there was no justification to deny the carry forward of loss.

We heard the rival submissions and perused the orders of the authorities below and the decisions relied upon. In this case the assessee has filed original return of income on 27.09.2012 declaring income of `61,70,784/-. In the original return of income the assessee has claimed loss of `6,27,41,471/- on currency derivation as speculative loss. However, a revised return was filed on 03.09.2014 declaring Nil income and claimed business loss at `5,64,53,923/-. The assessment was completed on 19.01.2015 under Section 143(3) of the Act determining the speculation loss at `6,27,41,471/-. While computing the speculation loss the AO ignored the revised return filed by the assessee which was filed beyond the time limit allowed for filing revised return and therefore the return was treated as invalid return. The claim of the assessee was not considered.

On appeal, the CIT(A) passed ex-parte order as the assessee did not attend before the CIT(A) despite service of notices.

In the grounds of appeal before us the assessee specifically raised ground stating that the order passed by the CIT(A) is bad in law as it has been passed ex-parte without granting proper opportunity to the assessee. It is the contention of the learned counsel that the issue is covered in its own case for subsequent A.Y. on merits and therefore the counsel submitted that the same may be followed. The learned counsel before us did not withdraw ground No. 1 which is on ex-parte order passed by the learned CIT(A). Taking the totality of facts and circumstances into consideration we are of the considered view that this matter has to go back to the file of the learned CIT(A) for fresh adjudication and the assessee has to cooperate with the proceedings before the CIT(A) for the reason that on earlier occasion the assessee did not appear before him. The assessee is at liberty to raise all contentions before the CIT(A). Thus, we restore this appeal to the file of the CIT(A) who shall adjudicate the issue in accordance with law after providing adequate opportunity of hearing to the assessee and the assessee is directed to cooperate with the proceedings before the learned CIT(A) without seeking unnecessary adjournments.