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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, Circle- 21(1), New Delhi vs. Religare Comtrade Ltd., New Delhi

The appeal of the Revenue is dismissed

ITA 5721/DEL/2017[2012-13]Status: DisposedITAT Delhi16 May 2025AY 2012-13

Bench: Smt. Annapurna Gupta & Ms Madhumita Royassessment Year: 2012-13 Dcit, Vs M/S Religare Comtrade Ltd Circle-21(1), (Formerly Known As Religare New Delhi. Bullion Ltd.), D-3, District Centre, Saket, New Delhi – 110 017. Pan: Aaecr8405P (Appellant) (Respondent) Assessee By : Shri Rohit Jain, Advocate & Ms Somya Jain, Ca Revenue By : Shri Sunil Yadav, Cit-Dr Date Of Hearing : 03.04.2025 Date Of Pronouncement : 16.05.2025 Order Per Annapurna Gupta, Am: The Present Appeal Has Been Filed By The Department Against Order Passed By The Commissioner Of Income Tax (Appeals)-36, New Delhi (Hereinafter Referred To As Cit(A)) Under Section 250 (6) Of The Income Tax Act 1961(Hereinafter Referred To As “Act”) Pertaining To Assessment Year 2012-13. 2. Grounds No.1 & 2 Raised By The Revenue Relate To The Same Issue Of Loss Incurred On Account Of Trading In Gold Derivatives Which Was Disallowed By The Ao Treating It As Speculative In Nature, In Terms Of Its Definition U/S 43(5) Of The Act, Which, However, Was Allowed By The Ld.Cit(A). The Said Grounds Read As Under:-

For Appellant: Shri Rohit Jain, Advocate &For Respondent: Shri Sunil Yadav, CIT-DR
Section 250Section 43(5)Section 43(5)(a)

erred in fact that the assessee has done trading in gold derivative on MCX which falls under the provision of section 43(5)(a) which was introduced in the act w.e.f. 01.04.2014 and was not applicable to F.Y. 2011-12 relevant to A.Y. 2012-13.” 3. The facts relating ... respect of his contracts for actual delivery of goods as per the exclusion to the definition of speculative transaction in proviso (a) to section 43(5) of the Act. The ld.CIT(A), however, found merit in the contention of the assessee and held that the loss incurred was on account

Assistant Commissioner of Income Tax, Corporate Circle 1(1), Chennai vs. M/S Cholamandalam Investment and Finance Company Limited, Chennai

ITA 2835/CHNY/2024[2014-15]Status: DisposedITAT Chennai28 Apr 2025AY 2014-15

Bench: Shri Aby T Varkey, Hon'Ble & Shri S. R. Raghunatha, Hon'Bleआयकर अपीलसं./Ita Nos.: 2613 & 2732/Chny/2024 निर्धारणवर्ष / Assessment Years: 2013-14 & 2014-15 Cholamandalam Investment & Finance Company Limited, Chola Crest, C 54 & C 55, Super B-4, Thiru Vi Ka Industrial Estate, Guindy, Guindy Industrial Estate S.O., Chennai - 600 032. [Pan: Aaacc-1226-H] (अपीलार्थी/Appellant) & The Deputy Commissioner Of Income Tax, V. Corporate Circle -1(1), Chennai - 600 034. (प्रत्यर्थी/Respondent) आयकर अपीलसं./Ita Nos.: 2835, 2836 & 2820/Chny/2024 निर्धारणवर्ष / Assessment Years: 2014-15, 2014-15 & 2015-16 The Assistant Commissioner Of Income Tax, Corporate Circle -1(1), Chennai - 600 034 Cholamandalam Investment & Finance Company V. Limited, (अपीलार्थी/Appellant) Chola Crest, C 54 & C 55, Super B-4, Thiru Vi Ka Industrial Estate, Guindy, Guindy Industrial Estate S.O., Chennai - 600 032. [Pan: Aaacc-1226-H] (प्रत्यर्थी/Respondent) Assessee By Department By : Mr. Ajith Kumar Jain Ca & Mr. Kunal Shah, Ca & Ms. Aashna Dhila, Ca : Mr. R. Clement Ramesh Kumar, Cit & Ms. Anitha, Addl.Cit सुनवाई की तारीख/Date Of Hearing : 12.02.2025 घोषणा की तारीख/Date Of Pronouncement : 28.04.2025 :-2-:

For Respondent: Mr. Ajith Kumar Jain CA & Mr. Kunal Shah, CA
Section 143(3)Section 250Section 43(5)

learned AO has erred in disallowing a sum of INR 6.27,10,303 treating as 'speculative' in nature as laid down under section 43(5) of the Act. 1.2 On the facts and circumstances of the case, and in law, the Hon'ble CIT(A) and the learned ... learned AO has erred in construing that in absence of actual delivery, the transaction shall be 'speculative' covered under section 43(5) of the Act. 1. 4. On the facts and circumstances of the case, and in law, the Hon'ble CIT(A) has erred in construing that the transaction

Cholamandalam Investment and Fianance Co. Ltd., Chennai vs. DCIT, Corporate Circle-1(1), Chennai

ITA 2732/CHNY/2024[2014-15]Status: DisposedITAT Chennai28 Apr 2025AY 2014-15

Bench: Shri Aby T Varkey, Hon'Ble & Shri S. R. Raghunatha, Hon'Bleआयकर अपीलसं./Ita Nos.: 2613 & 2732/Chny/2024 निर्धारणवर्ष / Assessment Years: 2013-14 & 2014-15 Cholamandalam Investment & Finance Company Limited, Chola Crest, C 54 & C 55, Super B-4, Thiru Vi Ka Industrial Estate, Guindy, Guindy Industrial Estate S.O., Chennai - 600 032. [Pan: Aaacc-1226-H] (अपीलार्थी/Appellant) & The Deputy Commissioner Of Income Tax, V. Corporate Circle -1(1), Chennai - 600 034. (प्रत्यर्थी/Respondent) आयकर अपीलसं./Ita Nos.: 2835, 2836 & 2820/Chny/2024 निर्धारणवर्ष / Assessment Years: 2014-15, 2014-15 & 2015-16 The Assistant Commissioner Of Income Tax, Corporate Circle -1(1), Chennai - 600 034 Cholamandalam Investment & Finance Company V. Limited, (अपीलार्थी/Appellant) Assessee By Department By Chola Crest, C 54 & C 55, Super B-4, Thiru Vi Ka Industrial Estate, Guindy, Guindy Industrial Estate S.O., Chennai - 600 032. [Pan: Aaacc-1226-H] (प्रत्यर्थी/Respondent) : Mr. Ajith Kumar Jain Ca & Mr. Kunal Shah, Ca & Ms. Aashna Dhila, Ca : Mr. R. Clement Ramesh Kumar, Cit & Ms. Anitha, Addl.Cit सुनवाई की तारीख/Date Of Hearing : 12.02.2025 घोषणा की तारीख/Date Of Pronouncement : 28.04.2025 :-2-:

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

learned AO has erred in disallowing a sum of INR 6.27,10,303 treating as 'speculative' in nature as laid down under section 43(5) of the Act. 1.2 On the facts and circumstances of the case, and in law, the Hon'ble CIT(A) and the learned ... learned AO has erred in construing that in absence of actual delivery, the transaction shall be 'speculative' covered under section 43(5) of the Act. 1. 4. On the facts and circumstances of the case, and in law, the Hon'ble CIT(A) has erred in construing that the transaction

Cholamandalam Investment and Finance Company Limited, Chennai, Tamil Nadu vs. Deputy Commissioner of Income-Tax (DCIT), Chennai-1, Chennai, Tamil Nadu

ITA 2613/CHNY/2024[2013-2014]Status: DisposedITAT Chennai28 Apr 2025AY 2013-2014

Bench: Shri Aby T Varkey, Hon'Ble & Shri S. R. Raghunatha, Hon'Bleआयकर अपील सं./Ita Nos.: 2613 & 2732/Chny/2024 निर्धारण वर्ष / Assessment Years: 2013-14 & 2014-15 Cholamandalam Investment & Finance Company Limited, Chola Crest, C 54 & C 55, Super B-4, Thiru Vi Ka Industrial Estate, Guindy, Guindy Industrial Estate S.O., Chennai - 600 032. [Pan: Aaacc-1226-H] (अपीलार्थी/Appellant) & आयकर अपील सं./Ita Nos.: 2835, 2836 & 2820/Chny/2024 निर्धारण वर्ष / Assessment Years: 2014-15, 2014-15 & 2015-16 The Assistant Commissioner Of Income Tax, Corporate Circle -1(1), Chennai - 600 034 (अपीलार्थी/Appellant) The Deputy Commissioner Of Income Tax, V. Corporate Circle -1(1), Chennai - 600 034. (प्रत्यर्थी/Respondent) Cholamandalam Investment & Finance Company V. Limited, Chola Crest, C 54 & C 55, Super B-4, Thiru Vi Ka Industrial Estate, Guindy, Guindy Industrial Estate S.O., Chennai - 600 032. [Pan: Aaacc-1226-H] (प्रत्यर्थी/Respondent) Assessee By : Mr. Ajith Kumar Jain Ca & Mr. Kunal Shah, Ca & Ms. Aashna Dhila, Ca Department By : Mr. R. Clement Ramesh Kumar, Cit & Ms. Anitha, Addl.Cit सुनवाई की तारीख/Date Of Hearing : 12.02.2025 घोषणा की तारीख/Date Of Pronouncement : 28.04.2025 :-2-:

For Appellant: Mr. Ajith Kumar Jain CA & Mr. Kunal Shah, CAFor Respondent: Mr. R. Clement Ramesh Kumar, CIT &
Section 143(3)Section 250Section 43(5)

learned AO has erred in disallowing a sum of INR 6.27,10,303 treating as 'speculative' in nature as laid down under section 43(5) of the Act. 1.2 On the facts and circumstances of the case, and in law, the Hon'ble CIT(A) and the learned ... learned AO has erred in construing that in absence of actual delivery, the transaction shall be 'speculative' covered under section 43(5) of the Act. 1.4. On the facts and circumstances of the case, and in law, the Hon'ble CIT(A) has erred in construing that the transaction under

Pankaj Agarwal, Kanpur vs. Jt.CIT Circle-1(1)(1), Kanpur

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

ITA 267/LKW/2023[2012-13]Status: DisposedITAT Lucknow22 Apr 2025AY 2012-13

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y. 2012-13 Pankaj Agarwal, 7/151, Ratan Vs. The Jt. Commissioner Of Majestic, Opp. Sony World, Income Tax, Circle 1(1)(1), Swaroop Nagar, Kanpur-208002 Kanpur-208001 Pan:Abjfs4912R (Appellant) (Respondent) Assessee By: Sh. Rakesh Garg, Adv Revenue By: Sh. Sanjeev Krishna Sharma Sr Dr & Sh Sunil Kumar Rajwanshi, Addl Cit Dr Date Of Hearing: 10.02.2025 Date Of Pronouncement: 22.04.2025 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Assessee Against The Order Passed By The Ld. Cit(A), Nfac Under Section 250 Of The Income Tax Act, 1961 On 21.08.2023. The Grounds Of Appeal Are As Under:- “1. Because The Cit (A) Has The Erred On Facts & In Law In Upholding The Disallowance Of Rs.2,47,02,865/- On Account Of Loss In Trading In Derivatives Business Treating The Same As Capital Loss, As Against Assessee'S Claim Of Business Loss, To Be Set Off Against Other Business Income, Which Order Is Contrary To Facts, Bad In Law, The Disallowance Made By The Ao & Upheld Be Deleted. 2. Because On A Proper Consideration Of The Facts & Circumstances Of The Case & Also On The Interpretation Of The Provisions Of Sec 43(5), It Would Be Found The Loss Of Rs.2,47,02,865/- On Account Of Trading In Derivative Is Neither A Speculative Loss Nor A Capital Loss, The Same Should Ought To Be Set Off Against Other Business Income, The Cit (A) Has Erred, In Treating The Same As Short Term Capital Loss.

For Appellant: Sh. Rakesh Garg, AdvFor Respondent: Sh. Sanjeev Krishna Sharma Sr DR & Sh
Section 14ASection 250Section 43(5)Section 72

loss should be allowed, the assessee submitted that the same was a non-speculative business loss, that was covered by the provisions of section 43(5) of the Income Tax Act and the set off was allowable, as per the provisions of section 72 of the Income ... investment, comprising of securities which were to be treated as a capital asset and a trading portfolio. It was further submitted that section 43(5) itself used the phrase, ‘trading in derivatives” and trading meant, buying and selling on a short-term basis for quick profits. It was further submitted