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

Anidhi Impex P.Ltd, Mumbai vs. DCIT 4(1), Mumbai

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

ITA 3998/MUM/2013[2009-10]Status: DisposedITAT Mumbai14 Aug 2023AY 2009-10

Bench: Shri Vikas Awasthy & Shri Amarjit Singhanidhi Impex Pvt. Ltd. Vs. Dy. Comm. Of It-4(1) C/O Asj & Company Llp, Room No. 638, Aaykar 201, Rajshila, 597, Jss Bhavan, Churchgate, Road, Near Marine Lines, Mumbai – 400020 Mumbai – 400 002 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaeca7748J Appellant .. Respondent [ Appellant By : Amit Porwal Respondent By : Manoj Kumar Sinha Date Of Hearing 18.05.2023 Date Of Pronouncement 14.08.2023 आदेश / O R D E R Per Amarjit Singh (Am): This Appeal Filed By The Assesse Is Directed Against The Order Passed By The Ld. Cit(A)-8, Mumbai, Dated 21.03.2013 For A.Y. 2009- 10. The Assessee Has Raised The Following Concise Ground Of Appeal Vide Letter Dated 26.03.2019: “1. On The Facts & Circumstances Of The Case & In Law Cit (A) Erred In Confirming The Action Of A.O. Of Treating The Loss Of Rs.1,84,26,264/- Incurred On Mcx Transactions As Speculative Loss U/S 43 (5) Of The Income Tax Act. 1961. 2. The Cit (A) Erred In Not Adjudicating The Ground Relating To Disallowance Of Expenses Rs. 7,851/; & Rs.1,62,819/- Incurred On Security Transaction Tax & Other Charges Of Mcx Respectively, Considered By The A.O. As Speculative. 3. Cit (A) Erred In Not Adjudicating The Ground Relating To The Disallowance Of Expenses Of Rs. 10,00,000/- By The A.O. On Estimation & Ad Hoc Basis Stating As Related To The Mcx Transactions & Hence Speculative In Nature, Without Even Confronting The Appellant Of This Proposed Action By Issuing Show Cause.

For Appellant: Amit PorwalFor Respondent: Manoj Kumar Sinha
Section 143(2)Section 43Section 43(5)Section 73

DCIT, Cir.-4(1), Kolkata vs. M/S Rav Dravya Pvt Ltd, Kolkata

In the result, appeal of the revenues is treated as partly allowed

ITA 103/KOL/2021[2012-13]Status: DisposedITAT Kolkata09 Nov 2022AY 2012-13

Bench: Shri Sanjay Garg, Hon’Ble & Shri Manish Borad, Hon’Blei.T.A. No. 103/Kol/2021 Assessment Year: 2012-13 Deputy Commissioner Of Income M/S. Rav Dravya Private Limited Tax, Circle-4(1), Kolkata Hastings Chambers, 2Nd Floor Vs 7/C, Kiran Shankar Roy Road Kolkata - 700001 Pan : Aabcr3154Q अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Ravi Tulsiyan, Fca Revenue By : Md. Ghayasuddin, Cit D/R सुनवाई क" तारीख/Date Of Hearing : 06/09/2022 घोषणा क" तारीख/Date Of Pronouncement : 09/11/2022 आदेश/O R D E R Per Shri Sanjay Garg: The Present Appeal Is Directed At The Instance Of The Revenue Against The Order Of The Learned Commissioner Of Income Tax (Appeals) - Kolkata (Hereinafter The “Ld. Cit(A)”) Dt. 13/03/2020, Passed U/S 250 Of The Income Tax Act, 1961 (“The Act’), For Assessment Year 2012-13. 2. This Revenue’S Appeal Is Time Barred By 198 Days & The Petition Seeking Condonation Of Delay Has Been Filed Stating That The Delay In Filing Of This Appeal Was Attributable To The Restrictions Imposed Due To Covid-19 Pandemic. We Have Heard Both The Sides & Find That There Is Reasonable Cause For Delay In Filing Of The Appeal On Time. Hence We Condone The Delay & Admit The Appeal For Hearing.

For Appellant: Shri Ravi Tulsiyan, FCAFor Respondent: Md. Ghayasuddin, CIT D/R
Section 14ASection 250