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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)

Pico Capital Private Limited (Successor in Interest of M/S Western India Garments Private Limited ), Mumbai vs. Deputy Commissioner of Income Tax-8(3)(2), Mumbai

In the result, appeal of the Revenue is dismissed and appeal of the assessee is allowed

ITA 4007/MUM/2023[2014-15]Status: DisposedITAT Mumbai22 Sept 2025AY 2014-15

Bench: Smt. Beena Pillai & Shri Girish Agrawalassessment Year: 2014-15 Pico Capital Private Limited Deputy Commissioner Of (Successor In Interest Of M/S Income Tax-8(3)(2), Western India Garments Private Mumbai Limited ) 22(1) Bombay Cotton Miis Vs. Compound, Dattaram Lad Path Kalachowky, Mumbai - 400033 (Pan: Aaacw2493G) (Appellant) (Respondent) Assessment Year: 2014-15 Deputy Commissioner Of Income Western India Garments Tax - 8(2)(1), Private Limited Mumbai 22(1) Bombay Cotton Miis Compound, Vs. Dattaram Lad Path Kalachowky, Mumbai - 400033 (Pan: Aaacw2493G) (Appellant) (Respondent) Present For: Assessee : Shri Dharan Gandhi, Advocate Revenue : Shri Arun Kanti Datta, Cit Dr Date Of Hearing : 03.07.2025 Date Of Pronouncement : 22.09.2025 O R D E R Pico Capital Pvt Ltd. & Western India Garments Pvt Ltd. Ay 2014-15 Per Girish Agrawal: These Two Appeals Filed By Assessee & Revenue Are Against The Order Of Ld. Cit(A), National Faceless Appeal Centre (Nfac), Delhi, Vide Order No. Itba/Nfac/S/250/2023-24/1056675304(1), Dated 29.09.2023 Passed Against The Assessment Order By Dcit, Circle - 8(3)(2), Mumbai, U/S. 143(3) Of The Income-Tax Act, 1961 (Hereinafter Referred To As The “Act”), Dated 13.12.2016 For Assessment Year 2014- 15. 2. Grounds Taken By The Assessee Are Reproduced As Under: 1. The Ld. Cit(A), Nfac Has Erred In Confirming The Disallowance Of Rs. 13,52,543/- Made U/S 14A R.W.R. 8D Of The Rules Over & Above The Disallowance Of Rs. 11,02,185/- Made By The Appellant. 2. The Assessment Order U/S 143(3) Of The Act, Dated 13.12.2016 Is Bad In Law As The Same Has Been Passed In The Name Of The Non-Existent Person. 3. The Ld. Ao, Has Erred In The Levying Interest Under Section 234B Of The Act. 4. The Ld. Ao Erred In Initiating Penalty Proceedings U/S 271(1)(C) Of The Act.

For Appellant: Shri Dharan Gandhi, AdvocateFor Respondent: Shri Arun Kanti Datta, CIT DR
Section 143(3)Section 14ASection 234BSection 271(1)(c)Section 36(1)(vii)

letter of NSEL, among other particulars clearly mentions the warehouse location where the said commodity owned by the assessee company is stored  Further section 43(5) of the Act provides as follows: “speculative transaction" means a transaction in which a contract for the purchase or sale of any commodity, including

Varun Batra, Mumbai vs. National Faceless Appeal Centre (NFAC), Delhi

In the result, the appeal filed by the assessee is hereby dismissed

ITA 3205/MUM/2022[2013-14]Status: DisposedITAT Mumbai31 Jul 2025AY 2013-14

Bench: Ms. Kavitha Rajagopal, Jm & Shri Prabhash Shankar, Am Varun Batra National Faceless Appeal Centre Flat 5, 5Th Floor, La Mer, Mistry Park, (Nfac) Kadeshwari Temple Road, Bandra Vs. West, Mumbai – 400050. Pan/Gir No. Aezpb9157L (Appellant) : (Respondent) Assessee By : None Respondent By : Ms. Kavita P. Kaushik, (Sr Dr) Date Of Hearing : 01.07.2025 Date Of Pronouncement : 31.07.2025 O R D E R Per Kavitha Rajagopal, J M: This Appeal Has Been Filed By The Assessee, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals) Delhi (‘Ld. Cit(A)’ For Short), National Faceless Appeal Centre (‘Nfac’ For Short) Passed U/S.250 Of The Income Tax Act, 1961 (‘The Act'), Pertaining To The Assessment Year (‘A.Y.’ For Short) 2013-14. 2. The Assessee Has Raised The Following Grounds Of Appeal: 1. That The Learned Commissioner Of Income Tax (Appeals), Delhi Has Grossly Erred Both In Law And, On Facts In Upholding The Determination Of Total Income Of The Appellant At Rs. 2,46,16,528/- As Against Declared Income At Rs. 2,30,52,930/- In An Order Of Assessment Dated 18.03.2016 U/S 143(3) Of The Act. 2. That The Learned Commissioner Of Income Tax (Appeals), Delhi Has Grossly Erred Both In Law & Fact In Holding That Sum Of Rs. 15,33,595/-Representing Loss On Account Of Share Trading. Varun Batra

For Appellant: NoneFor Respondent: Ms. Kavita P. Kaushik, (SR DR)
Section 143(2)Section 143(3)Section 234BSection 234CSection 250Section 68Section 71Section 72

been considered by the ld. AO who had merely held the transaction to be a speculative transaction without considering the provisions of Section 43(5) of the Act. The assessee 4 Varun Batra further submitted that the profit/loss from share/commodity derivatives qualify as business profit or loss as per Section ... contentions. The same was rejected by the lower authorities for the reason that the amendment brought about to the provision to Section 43(5) of the Act where commodity derivative transactions was included as business income and excluded from the preview of speculative transaction as per Finance