Section 73 of the Income Tax Act

Income-tax Act, 2025: s.113

Section 73 of the Income-tax Act, 1961 corresponds to section 113 (Set off and carry forward of losses computed in respect of speculation business) of the Income-tax Act, 2025.

Read section 113 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 73 is 3. CIT v. ASHOK KUMAR SONI (262 ITR 633), cited in 101 of the 521 judgments on BharatTax that turn on this section.

Leading authorities on Section 73

3. CIT v. ASHOK KUMAR SONI
262 ITR 633 · 2003 · High Court
101
citing judgments

This case is cited for the proposition that oral admissions made during the course of a search can be considered as evidence.

CIT v. DLF Commercial Developers Ltd.
35 Taxmann.com 280 · 2013 · High Court
51
citing judgments

Loss incurred by certain types of companies in trading derivatives is considered speculative loss under the Explanation to Section 73, as the value of stock derivatives depends on shares. Such speculative losses are ineligible for set-off or carry forward against business income.

Ravindranathan Nair v. CIT
247 ITR 178 · 2001 · Supreme Court
42
citing judgments

The Income Tax Appellate Tribunal is the final fact-finding authority. A High Court can only interfere with the Tribunal's factual findings if a specific question alleging perversity of such findings, in the sense that they could not have been reasonably arrived at, has been referred to it.

M/s Liberty India Vs. CIT 225 CTR 233(SC), CIT v. Sterling Foods
227 ITR 557 · 1997 · Supreme Court
32
citing judgments

Income from a deferred VAT rebate granted by a state government for sales tax incentives is not considered income derived from an industrial undertaking and is therefore not eligible for deduction under Section 80IC.

CIT v. Darshan Securities (P) Ltd.
341 ITR 556 · 2012 · High Court
27
citing judgments

A company involved in the purchase and sale of shares is deemed to be carrying on a speculative business to the extent of such transactions, unless it falls under an exception to Section 73 of the Income Tax Act.

Patnaik & Co. Ltd. v. CIT
161 ITR 365 · 1986 · Supreme Court
26
citing judgments

Losses arising from the sale of investments made for business purposes are treated as business losses, not capital losses.

CIT v. VGR Foundations
298 ITR 132 · 2008 · High Court
21
citing judgments

Interest earned by a company on share application money deposited in banks is taxable as income from other sources, even if the funds are intended for the business.

Snowtex Investment Limited v. PCIT
414 ITR 227 · 2019 · Supreme Court
16
citing judgments

The Supreme Court held that losses from delivery-based share trading cannot be set off against profits from derivatives trading if the principal business of the assessee is not the granting of loans and advances, as per the explanation to Section 73.

TRF Ltd. v. CIT
323 ITR 167 · Reported
12
citing judgments

After April 1, 1989, it is sufficient to write off a debt as irrecoverable in the books to claim a bad debt deduction; it is not necessary to establish that the debt has become irrecoverable.

CIT v. HSBC Securities and Capital Market India Private Limited
208 Taxmann 439 · 2012 · High Court
10
citing judgments

Judgments on Section 73

I.T.O. 9(2)(3), Mumbai vs. Natraj Financial & Services Pvt. Ltd., Mumbai

In the result, ground of appeal raised by Revenue is dismissed

ITA 7269/MUM/2011[2008-09]Status: DisposedITAT Mumbai22 Jun 2018AY 2008-09

Bench: Shri Pawan Singh & Shri Rajesh Kumarito-9(2)(3), M/S Natraj Financial & Services Pvt. R. No. 225, Aayakar Bhavan, Ltd. 12/D-1, Estee Jeejay Co-Op. M.K. Road, Vs. Hsg. Soc., Sai Baba Nagar, Mumbai-20. Borivali(W), Mumbai-400092 Pan: Aabcn3770A (Appellant) (Respondent) Revenue By : Shri Suman Kumar (Dr ) : Shri N.M. Porwal (Ar) Assessee By 30.05.2018 Date Of Hearing Date Of Pronouncement 22.06.2018 Order Under Section 254(1) Of Income Tax Act Per Pawan Singh: 1. This Appeal By Revenue Is Directed Against The Order Of Learned Commissioner (Appeals)-20, Mumbai Dated 23Rd August 2011 For Assessment Year 2008-09, Which Arises From The Assessment Order Passed By Assessing Officer Under Section 143(3) Dated 27Th Of December 2010. 2. Brief Facts Of The Case Are That Assessee Is A Private Limited Company & Is In The Business Of Investment & In Dealing In Shares & Securities. Assessee-Company Filed Its Return Of Income For Assessment Year 2008- 09 On 29Th September 2008 Declaring Nil Income. The Assessment Was Completed On 27Th December 2010 Under Section 143(3). The Assessing Officer While Passing The Assessment Order Noted That The Assessee Has Shown Loss In Share Transaction Of Rs. 57,77,584/- Which Is More Than The Income By Way Of Brokerage Interest, Short-Term Capital Gain, Long-Term Capital Gain & Other Income. Therefore, The Gross Total Income Of The Assessee Consist Mainly Of Income Which Is Chargeable Under The Head

For Respondent: Shri Suman Kumar (DR )
Section 143(3)Section 254(1)Section 73