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

Ghanshyam Share & Stock Brokers, Mumbai vs. DCIT 4(1), Mumbai

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

ITA 3573/MUM/2014[2009-10]Status: DisposedITAT Mumbai04 Oct 2016AY 2009-10

Bench: Shri Sanjay Arora, Am & Shri Amarjit Singh, Jm आयकर अपील सं./I.T.A. No. 3573/Mum/2014 ("नधा"रण वष" / Assessment Year: 2009-10) Ghanshyam Share & Stock Brokers Dy. Cit, Range 4(1), Aayakar Bhavan, 6Th Floor, Pvt. Ltd., बनाम/ C/O. D. C. Jain & Co., R. N. 640, M. K. Road, 75, Bombay Mutual Bldg., 1St Floor, Mumbai Vs. D. N. Road, Fort, Mumbai-400 001 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaacg 3561 H (Assessee) (Revenue) : आयकर अपील सं./I.T.A. No. 3762/Mum/2014 ("नधा"रण वष" / Assessment Year: 2009-10) Dy. Cit, Range 4(1), Ghanshyam Share & Stock Brokers बनाम/ Room Ni. 640, 6Th Floor, Pvt. Ltd., 24, 2Nd Fanaswadi, D. A. Lane, Aaykar Bhavan, M. K. Road, Vs. Mumbai Mumbai-400 004 (Revenue) (Assessee) : Assessee By : Shri D. C. Jain Revenue By : Shri Airiju Jaikaran सुनवाई क" तार"ख / : 23.06.2016 Date Of Hearing घोषणा क" तार"ख / : 04.10.2016 Date Of Pronouncement आदेश / O R D E R Per Sanjay Arora, A. M.: These Are Cross Appeals, I.E., By The Assessee & The Revenue, Directed Against The Order By The Commissioner Of Income Tax (Appeals)-8, Mumbai (‘Cit(A)’ For Short) Dated 13.03.2014, Partly Allowing The Assessee’S Appeal Contesting It’S

For Appellant: Shri D. C. JainFor Respondent: Shri Airiju Jaikaran
Section 143(3)

DCIT 4(1), Mumbai vs. Ajmera Asociates Ltd, Mumbai

In the result, appeal of the revenue is dismissed

ITA 3760/MUM/2014[2009-10]Status: DisposedITAT Mumbai22 Jul 2016AY 2009-10

Bench: Shri R.C.Sharma, Am & Shri Ram Lal Negi, Jm आयकर अपील सं./Ita No.3760/Mum/2014 ("नधा"रण वष" / Assessment Year :2009-2010) Dcit-4(1), Mumbai-400020 Vs. M/S Ajmera Associates Ltd., 63/67, Carmello Bldg., Pathakwadi, Opp. G.T.Hospital, L.T.Marg, Mumbai-400002 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aadca 7062 J .. (अपीलाथ" /Appellant) (""यथ" / Respondent) "नधा"रती क" ओर से /Assessee By : Shri Morya Pratap राज"व क" ओर से /Revenue By : Shri Nishit Gandhi सुनवाई क" तार"ख / Date Of Hearing : 30/05/2016 घोषणा क" तार"ख/Date Of Pronouncement 22/07/2016 आदेश / O R D E R Per R.C.Sharma (A.M): This Is An Appeal Filed By The Revenue Against The Order Of Cit(A)- Mumbai, For The Assessment Year 2009-2010. 2. Rival Contentions Have Been Heard & Record Perused. Facts In Brief Are That The Assessee Is Engaged In The Business Of Share Broking. It Is Also A Member Of Bse & Nse & Engaged In The Business Of Share Broking & Dealing In Shares. During The Course Of Scrutiny Assessment The Ao Found That The Assessee Has Shown Arbitrage Income Of Rs.28,62,845/- (After Deducting Arbitrage Expenses). The Assessee Company Is Requested To Submit The Bifurcation Of Arbitrage Income Segment Wise I.E. Share Trading & Derivatives. As Per The Details Filed By Rs.8,99,70,127/- & Incurred Loss Of Rs.6,01,53,038/- On Derivatives & Share Trading Transactions. The Assessee Company Was Asked To Explain

For Appellant: Shri Morya PratapFor Respondent: Shri Nishit Gandhi
Section 43(5)Section 73