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“Section 43(5)”

Section References (mined)Section 43Section 43(5)238 judgments

The decision most relied on for Section 43(5) is CIT v. Woodward Governor India Pvt. Ltd. (312 ITR 254), cited in 968 judgments on BharatTax.

Leading authorities on Section 43(5)

CIT v. Woodward Governor India Pvt. Ltd.
312 ITR 254 · 2009 · Supreme Court
968
citing judgments

Foreign exchange fluctuations, whether gains or losses, are inextricably linked to the underlying business transaction and must be accounted for under the mercantile system. The Supreme Court also affirmed the standard accounting principle of valuing stock at cost or net realisable value, whichever is lower.

Brooke Bond India Ltd. v. CIT
225 ITR 798 · 1997 · Supreme Court
228
citing judgments

Expenditure incurred for increasing a company's share capital or expanding its capital base, such as expenses related to the issue of shares, constitutes capital expenditure. Such expenses are not deductible as revenue expenditure under Section 37(1) of the Income-tax Act, 1961, even if they incidentally benefit the business.

DCIT v. Reliance Industries Ltd.
88 ITD 273 · 2004 · ITAT
169
citing judgments

Interest, sales tax, and purchase tax subsidies received by an assessee are generally considered capital receipts, not revenue income, for income tax purposes.

Punjab State Industrial Development Corporation Ltd. v. CIT
225 ITR 792 · 1997 · Supreme Court
158
citing judgments

Expenditure incurred for increasing a company's share capital, such as expenses related to issuing shares or an initial public offering (IPO), is capital expenditure. Such expenses are not allowable as a revenue deduction under Section 37, even if they incidentally benefit the business, because they result in an increase in capital.

CIT v. Chaphalkar Brothers
400 ITR 279 · 2018 · Supreme Court
136
citing judgments

A subsidy is classified as a capital receipt if its object is to enable the assessee to set up or expand a new or existing unit. Conversely, it is a revenue receipt if its purpose is to help the assessee run the business more profitably.

CIT v. Rittal India (P) Limited
380 ITR 423 · 2016 · High Court
121
citing judgments

Additional depreciation is allowable under section 32(1)(iia) for new machinery or plant even when put to use for less than 180 days, with the unabsorbed balance available for claim in the subsequent year.

CIT v. Badridas Gauridu (P) Ltd.
261 ITR 256 · 2003 · High Court
114
citing judgments

Losses incurred from foreign exchange forward contracts or derivatives, entered into to hedge currency fluctuations in the course of regular business like exports, are treated as business losses and not as speculative transactions under Section 43(5). Such contracts, when incidental to business and cover exchange rate risks, constitute a business activity.

CIT v. Oswal Agro Mills Ltd.
341 ITR 467 · 2012 · High Court
108
citing judgments

The Legislature abolished terminal depreciation under section 32(1)(iii) and the taxing of balancing charge under section 41(2), replacing these provisions with the requirement to reduce sale proceeds of depreciable assets from the block of assets.

Judgments citing Section 43(5)

DCIT CC-2, Faridabad vs. A2Z Maintenance and Engineering Services Ltd., Gurgaon

In the result, the appeal of the assessee is allowed

ITA 811/DEL/2019[2011-12]Status: DisposedITAT Delhi28 Mar 2023AY 2011-12

Bench: Shri Pradip Kumar Kedia & Shri Anubhav Sharma

For Appellant: Ms. Ritu Kamal KishoreFor Respondent: Shri P. Praveen Sidharth, CIT-DR
Section 132Section 132(4)Section 153ASection 271(1)(c)Section 274

that loss on forward commodity in the nature of hedging transaction is excluded from the purview of definition of speculative transaction provided under Section 43(5) of the Act and thus the loss has been rightly claimed as business loss. The Assessing Officer however treated the loss on forward trading

A2Z Maintenance & Engineering Services Ltd., Gurgaon vs. DCIT, Central Circle-II, Faridabad

In the result, the appeal of the assessee is allowed

ITA 2631/DEL/2018[2008-09]Status: DisposedITAT Delhi28 Mar 2023AY 2008-09

Bench: Shri Pradip Kumar Kedia & Shri Anubhav Sharma

For Appellant: Ms. Ritu Kamal KishoreFor Respondent: Shri P. Praveen Sidharth, CIT-DR
Section 132Section 132(4)Section 153ASection 271(1)(c)Section 274

that loss on forward commodity in the nature of hedging transaction is excluded from the purview of definition of speculative transaction provided under Section 43(5) of the Act and thus the loss has been rightly claimed as business loss. The Assessing Officer however treated the loss on forward trading

Anirudh Baheti HUF, Jaipur vs. ITO Ward 3(2), Jaipur

In the result, appeal of the assessee is allowed

ITA 28/JPR/2023[2013-14]Status: DisposedITAT Jaipur06 Mar 2023AY 2013-14

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri B. P. Mundra (C.A.) &For Respondent: Smt Monisha Choudhary (Addl. CIT) a
Section 147Section 271BSection 44A

There is no quarrel that the transactions carried out by the assessee in intraday non- delivery based segment are speculative transactions as per section 43(5) of the Act. This fact is also accepted by the learned Commissioner (Appeals) in his finding in para 2.3 as under :-- 'Ground ... applicable for transaction of derivatives whereas assessee transacted in cash securities where non delivery based transactions are classified as speculative transactions as per section 43(5) of the Income Tax Act, 1961. Accordingly assessee is liable to get his accounts audited. Looking to these facts, penalty under 10 Anirudh Baheti

Shri Raghav Aggarwal, Jammu vs. Income Tax Officer Ward-1 (2), Jammu

In the result, the appeal of the assessee bearing ITA No

ITA 568/ASR/2019[2014-15]Status: DisposedITAT Amritsar02 Mar 2023AY 2014-15

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250Section 43(5)

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE

Income Tax Officer Ward-1(1), Bathinda vs. M/S Apex Fibre India Limited, Bathinda

ITA 84/ASR/2020[2016-17]Status: DisposedITAT Amritsar23 Feb 2023AY 2016-17

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 145(3)Section 43(5)Section 45(3)

holding that the transactions under took by the assessee are not speculative in nature disregarding the definition of speculative transaction provided by section 43(5) of the Act. (iii) The CIT(A) has erred in holding that the AO was not justified in invoking provisions of section ... appeal of the assessee. The CIT(A) held that the transactions undertook by the assessee were not speculative within the meaning of section 43(5) of the Act. The CIT(A) held that the interest earned on FDRs and other interest had an immediate nexus with the business

Deputy Commissioner of Income Tax Circle-1, Bathinda vs. M/S G.H. Crop Science Private Limited, Bathinda

ITA 56/ASR/2020[2016-17]Status: DisposedITAT Amritsar23 Feb 2023AY 2016-17

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 145(3)Section 43(5)Section 45(3)

holding that the transactions under took by the assessee are not speculative in nature disregarding the definition of speculative transaction provided by section 43(5) of the Act. (iii) The CIT(A) has erred in holding that the AO was not justified in invoking provisions of section ... appeal of the assessee. The CIT(A) held that the transactions undertook by the assessee were not speculative within the meaning of section 43(5) of the Act. The CIT(A) held that the interest earned on FDRs and other interest had an immediate nexus with the business

Mitsubishi Electric Automotive, Gurgaon vs. DCIT, Circle- 2(1), Gurgaon

In the result, the appeal is partly allowed

ITA 7512/DEL/2017[2013-14]Status: DisposedITAT Delhi11 Jan 2023AY 2013-14

Bench: Shri G.S. Pannu & Shri Saktijit Deyassessment Year: 2013-14

Section 143(3)Section 144CSection 3(1)(iii)Section 43(5)

proceeded to hold that the hedging transactions between the assessee and BTMU, in reality, is in the nature of speculative transaction covered under Section 43(5) of the Act. With such reasoning, he disallowed the claimed deduction of Rs.2,63,36,331. 7. Against the aforesaid decision of the Assessing ... Further, he has held that the amount paid to BTMU is in respect of speculative transaction under Section 43(5) of the Act. 12. In our considered opinion, the aforesaid reasoning of the Assessing Officer are unsustainable. As discussed earlier, as per the foreign currency swap contracts, the assessee

M/S Ramavtar Krishanavtar, Kota vs. Income Tax Officer, Kota

In the result, the appeal of the assessee is partly allowed

ITA 214/JPR/2018[2014-15]Status: DisposedITAT Jaipur05 Jan 2023AY 2014-15

Bench: Hon’ble SHRI SANDEEP GOSAIN (Judicial Member)

For Appellant: Shri Saurav Harsh, AdvocateFor Respondent: Smt. Monisha Choudhary, JCIT
Section 143(2)Section 234ASection 43Section 43(5)(e)

reply mentioning that the loss was of the nature of regular business and also stated that in view of the provisions of Section 43(5)(e), the same cannot be treated as speculative and therefore, the same is allowable against the business income of the assessee. The assesee also submitted ... carried out through the broker Anand Rathi Commodities and all the trades had been executed NCDEX. In this case, the AO has revisited Section 43(5)(e) of the Act in the assessment order and observed that for the transaction to be out of purview of the speculative transactions, following

Bharat Mines and Minerals, Bangalore vs. Assistant Commissioner of Income Tax, Circle-1(2)(1), Bangalore

In the result, the assessee’s appeal is partly allowed for statistical purposes

ITA 974/BANG/2022[2011-12]Status: DisposedITAT Bangalore23 Nov 2022AY 2011-12

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2011 – 12

For Appellant: Shri K.R. Pradeep &For Respondent: Shri A. Ramesh Kumar, D.R
Section 10BSection 142(1)Section 143(2)Section 143(3)

TOTAL 69,32,00,000 20,67,40,000 Bharat Mines and Minerals, Bangalore Page 22 of 25 13. As per definition of Section 43(5) of the Act trading of shares which is done by taking delivery does not come under the purview of the said Section. Similarly ... clause (d) of Section 43(5) derivative transaction in shares is also not speculation transaction as defined in the said section. Therefore, both profit/loss from all the share delivery transactions and derivative transaction are having the same meaning, so far as Section 45(3) of the Act is concerned

Lakshmanan, Chennai vs. ITO, Ncw - 1 (3), Chennai

In the result, appeal filed by the assessee in ITA No

ITA 2744/CHNY/2019[2015-16]Status: DisposedITAT Chennai18 Nov 2022AY 2015-16

Bench: Shri Mahavir Singh, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकर अपील सं./Ita No.2882/Chny/2018 & नि◌धा"रण वष" /Assessment Year: 2015-16 V. Mr.Lakshmanan, The Income Tax Officer, No.7/2, 1St Floor, Akm Nest, Non-Corporate Ward-1(3), Jawaharlal Nehru Street, T.Nagar, Chennai. Chennai-600 017. [Pan: Aabpl 4326 R] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Mr.T. Vasudevan, AdvFor Respondent: Mr.AR.V.Sreenivasan
Section 43(5)Section 45

आयकर अपीलीय अिधकरण, ‘ए’ "यायपीठ, चे"ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI "ी महावीर िसंह, माननीय उपा

Lakshmanan Revathi, Chennai vs. ITO N.C.W 1(3), Chennai

In the result, appeal filed by the assessee in ITA No

ITA 2883/CHNY/2018[2015-16]Status: DisposedITAT Chennai18 Nov 2022AY 2015-16

Bench: Shri Mahavir Singh, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकर अपील सं./Ita No.2882/Chny/2018 & नि◌धा"रण वष" /Assessment Year: 2015-16 V. Mr.Lakshmanan, The Income Tax Officer, No.7/2, 1St Floor, Akm Nest, Non-Corporate Ward-1(3), Jawaharlal Nehru Street, T.Nagar, Chennai. Chennai-600 017. [Pan: Aabpl 4326 R] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Mr.T. Vasudevan, AdvFor Respondent: Mr.AR.V.Sreenivasan
Section 43(5)Section 45

आयकर अपीलीय अिधकरण, ‘ए’ "यायपीठ, चे"ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI "ी महावीर िसंह, माननीय उपा

Lakshmanan, Chennai vs. ITO N.C.W 1(3), Chennai

In the result, appeal filed by the assessee in ITA No

ITA 2882/CHNY/2018[2015-16]Status: DisposedITAT Chennai18 Nov 2022AY 2015-16

Bench: Shri Mahavir Singh, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकर अपील सं./Ita No.2882/Chny/2018 & नि◌धा"रण वष" /Assessment Year: 2015-16 V. Mr.Lakshmanan, The Income Tax Officer, No.7/2, 1St Floor, Akm Nest, Non-Corporate Ward-1(3), Jawaharlal Nehru Street, T.Nagar, Chennai. Chennai-600 017. [Pan: Aabpl 4326 R] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Mr.T. Vasudevan, AdvFor Respondent: Mr.AR.V.Sreenivasan
Section 43(5)Section 45

आयकर अपीलीय अिधकरण, ‘ए’ "यायपीठ, चे"ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI "ी महावीर िसंह, माननीय उपा

Deputy Commissioner of Income Tax, Circle- 4(1)(1), Bangalore vs. M/S. Lifestyle International Private Limited, Bangalore

In the result, the assessee’s appeal stands allowed and revenue’s appeal stands dismissed

ITA 93/BANG/2020[2013-14]Status: DisposedITAT Bangalore18 Nov 2022AY 2013-14

Bench: Smt Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2013-14 M/S. Lifestyle International Pvt. Ltd., 77, Town Centre, The Deputy Building No. 3, Commissioner Of West Wing, Income Tax, Off Hal Airport Road, Circle – 4(1)(1), Yamlur, Vs. Bengaluru. Bengaluru – 560 037. Pan: Aaacl2937J Appellant Respondent & Assessment Year : 2013-14 (By Revenue)

Section 2Section 37Section 43(6)(c)Section 50B

derived on fair value as on the balance sheet date, disallowed by the Ld.AO, holding it to be speculative loss in terms of Section 43(5) of the Act. 2.6 The Ld.AO also noted that, the assessee had belated remittances of EPF amounting to Rs.6,63,518/- which was disallowed ... Conclusion of Particulars No Rs. CIT(A) Disallowance of the premium on 2,61,37,084 Allowed in favour 1 forward cover under section 43(5) of Assessee read with section 73 of the Act Rejection of claim made by the Assessee during the course of Allowed in favour

M/S Dell International Services India Private Limited, Bangalore vs. Joint Commissioner of Income Tax Ltu, Bangalore

In the result, the appeals of the assessee and the revenue are partly allowed

ITA 932/BANG/2017[2012-13]Status: DisposedITAT Bangalore14 Nov 2022AY 2012-13

Bench: Smt. Beena Pillai & Ms. Padmavathy Sit(Tp)A No.844/Bang/2017 Assessment Year : 2012-13 The Joint Vs. M/S.Dell International Services India Commissioner Of Private Limited, Income Tax, Ltu, (For The Merged Entity Dell India Bangalore. Private Limited), No.12/1, 12/2A, 13/1A, Divyashree Gardens, Challagutta Village, Varthur Hobli, Bangalore – 560 071. Pan : Aaach1925Q Appellant Respondent It(Tp)A No.932/Bang/2017 Assessment Year : 2012-13 M/S.Dell International Services Vs. The Joint Commissioner India Private Limited, Of Income Tax, Ltu, (For The Merged Entity Dell India Bangalore. Private Limited), Bangalore – 560 071. Pan : Aaach1925Q Appellant Respondent Revenue By : Shri Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru. Assessee By : Shri T. Suryanarayana, Advocate Date Of Hearing : 07.11.2022 Date Of Pronouncement : 14.11.2022

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Shri
Section 143(2)Section 92C

disallowed the same holding it to be a notional and contingent and treated the same as a speculative loss in terms of Section 43(5) of the Act. The Assessing Officer having noted that the forward contracts are in respect of debtors, relying on Instruction No. 3/2010 issued ... Direct Taxes concluded that it is a notional loss and has to be treated the same as a speculative loss in terms of Section 43(5) of the Act. 65. In this regard, the ld AR submitted that the MTM losses has arisen due to hedging in revenue transactions

Joint Commissioner of Income Tax (Ltu), Bangalore vs. M/S Dell International Services India Private Limited, Bangalore

In the result, the appeals of the assessee and the revenue are partly allowed

ITA 844/BANG/2017[2012-13]Status: DisposedITAT Bangalore14 Nov 2022AY 2012-13

Bench: Smt. Beena Pillai & Ms. Padmavathy Sit(Tp)A No.844/Bang/2017 Assessment Year : 2012-13 The Joint Vs. M/S.Dell International Services India Commissioner Of Private Limited, Income Tax, Ltu, (For The Merged Entity Dell India Bangalore. Private Limited), No.12/1, 12/2A, 13/1A, Divyashree Gardens, Challagutta Village, Varthur Hobli, Bangalore – 560 071. Pan : Aaach1925Q Appellant Respondent It(Tp)A No.932/Bang/2017 Assessment Year : 2012-13 M/S.Dell International Services Vs. The Joint Commissioner India Private Limited, Of Income Tax, Ltu, (For The Merged Entity Dell India Bangalore. Private Limited), Bangalore – 560 071. Pan : Aaach1925Q Appellant Respondent Revenue By : Shri Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru. Assessee By : Shri T. Suryanarayana, Advocate Date Of Hearing : 07.11.2022 Date Of Pronouncement : 14.11.2022

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Shri
Section 143(2)Section 92C

disallowed the same holding it to be a notional and contingent and treated the same as a speculative loss in terms of Section 43(5) of the Act. The Assessing Officer having noted that the forward contracts are in respect of debtors, relying on Instruction No. 3/2010 issued ... Direct Taxes concluded that it is a notional loss and has to be treated the same as a speculative loss in terms of Section 43(5) of the Act. 65. In this regard, the ld AR submitted that the MTM losses has arisen due to hedging in revenue transactions

ACIT -6(1)(1), Mumbai vs. M/S. Clothing Culture Ltd., Mumbai

In the result, appeal of the Revenue is dismissed

ITA 495/MUM/2021[2014-15]Status: DisposedITAT Mumbai31 Oct 2022AY 2014-15

Bench: This Tribunal By The Revenue During The Covid Period. Hence, In View Of The Relaxation Granted By The Hon’Ble Supreme Court, The Delay Of 123 Days Is Hereby Condoned & Appeal Of The Revenue Is Admitted For Adjudication.

Section 133ASection 143(3)Section 43(5)Section 68

that commodity transactions entered into by the assessee company on National Spot Exchange Ltd(NSEL) were not speculative transactions within the meaning of section 43(5) of the Act without appreciating the fact that alleged transactions were not supported by documentary evidence of actual delivery of goods." 5 ... relief to the assessee by holding that the loss incurred on commodity transactions by the assessee is covered by express provisions contained in Section 43(5)(d) of the Act and hence, the said loss should be construed only as normal business loss. With regard to allowability of deduction

ACIT Pondicherry Circle, Pondicherry vs. Integra Software Services P Ltd, Pondicherry

Appeal stand partly allowed for statistical purposes

ITA 259/CHNY/2020[2014-15]Status: DisposedITAT Chennai21 Oct 2022AY 2014-15

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri R Bhoopathi (JCIT) – Ld. DRFor Respondent: Shri N. Arjunraj (CA) for Shri. S. Sridhar (Advocate) – Ld. AR
Section 195(6)Section 37(1)Section 40

आयकर अपीलीय अिधकरण ’बी’ "ायपीठ चे"ई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHENNAI माननीय ,ी महावीर िसंह

ACIT Pondicherry Circle, Pondicherry vs. Integra Software Services P Ltd, Pondicherry

Appeal stand partly allowed for statistical purposes

ITA 258/CHNY/2020[2013-14]Status: DisposedITAT Chennai21 Oct 2022AY 2013-14

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri R Bhoopathi (JCIT) – Ld. DRFor Respondent: Shri N. Arjunraj (CA) for Shri. S. Sridhar (Advocate) – Ld. AR
Section 195(6)Section 37(1)Section 40

आयकर अपीलीय अिधकरण ’बी’ "ायपीठ चे"ई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHENNAI माननीय ,ी महावीर िसंह

ACIT Pondicherry Circle, Pondicherry vs. Integra Software Services P Ltd, Pondicherry

Appeal stand partly allowed for statistical purposes

ITA 257/CHNY/2020[2010-11]Status: DisposedITAT Chennai21 Oct 2022AY 2010-11

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri R Bhoopathi (JCIT) – Ld. DRFor Respondent: Shri N. Arjunraj (CA) for Shri. S. Sridhar (Advocate) – Ld. AR
Section 195(6)Section 37(1)Section 40

आयकर अपीलीय अिधकरण ’बी’ "ायपीठ चे"ई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHENNAI माननीय ,ी महावीर िसंह

Integra Software Services P. Ltd., Chennai vs. DCIT, Pondicherry

The appeal stands partly allowed in terms of our above order

ITA 736/CHNY/2017[2012-13]Status: DisposedITAT Chennai21 Oct 2022AY 2012-13

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri N. Arjunraj (CA) for Shri. S. Sridhar (Advocate) – Ld. ARFor Respondent: Shri R. Bhoopathi (JCIT) / Shri. Kumar Ajeet Ld. CIT-DR
Section 143(3)Section 144C(5)Section 14ASection 195Section 40Section 43(5)Section 9(1)(vii)Section 92C

DCIT erred in disallowing Rs.1,64,24,085/- being the loss suffered in dealing in forex derivatives on the misconstruction of section 43(5) of the Act and consequently erred in adding back such sum in the computation of taxable total income both under normal computation as well