Landmark Cases on Set-off and Carry Forward of Losses

A company whose principal business is trading in shares incurs a loss from share trading that is treated as normal business loss, not speculation loss, and can be adjusted against other business income.

A change in the head of loss from business to speculative loss does not automatically warrant an inference of concealment of income for the purpose of invoking penalty provisions.

Deductions under Sections 80HH and 80-I are to be allowed with reference to the profits of the particular industrial undertaking, not the total income, meaning losses from one unit cannot be set off against profits of an eligible unit.

Loss incurred in share trading is treated as speculative loss if it falls within the Explanation to Section 73 of the Income Tax Act, 1961.

Losses arising from share transactions are not considered speculation losses under Section 73 of the Income Tax Act if the assessee is not a company controlled by a business house and the transactions are not aimed at manipulating taxable income or controlling group companies.