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Commissioner Of Income-Tax vs Shivlal Dhirajlal on 26 June, 1991 cites

Commissioner Of Income Tax, Gujarat vs M/S. S. C. Kothari on 5 October, 1971

This court observed that it would not be correct to read the judgment of the Supreme Court in S. C. Kothari's case [1971] 82 ITR 794 as laying down a principle that illegal losses can be set off against other business income. It was observed that to read such a broad proposition in the judgment would result in upsetting all the known and settled legal principles and it would introduce certain new concepts which are irrelevant and alien to the income-tax law. This court, therefore, held that the assessee was not entitled to set off loss in respect of illegal speculative transactions against other income of the assessee.
Supreme Court of India Cites 22 - Cited by 102 - A N Grover - Full Document

Additional Commissioner Of ... vs Ranjitsinhji Oil Mills Pvt. Ltd. on 19 September, 1975

15. The question which arose for consideration before this court in Addl. CIT v. Ranjitsinhji Oil Mills Pvt. Ltd. [1976] 103 ITR 405 was whether the assessee, on the ratio of the Supreme Court's decision in the case of S. C. Kothari [1971] 82 ITR 794, was entitled to set off and carry forward its illegal speculative losses against any other business income. The above question arose for consideration in three references in which the facts involved and the questions referred were identical. We will, therefore, refer to the facts involved in only one of the references, namely, Income-tax Reference No. 46 of 1974, in which the year under reference was 1962-63. In that reference, the assessee-firm was an oil mill with three expellers. The business of the assessee-company was to purchase ground-nut oil and oil cakes. It incurred a loss of Rs. 44,326 being the amount of difference paid in the various forward contracts entered into with its customers. On scrutiny of its books of account and other relevant documents, the Income-tax Officer found that the said loss was incurred in settlement of the transactions in which no delivery of the goods was actually taken or made. He also found that the assessee earned a profit of Rs. 5,268 in the said transactions. The net loss to the assessee in the financial year relevant to the assessment year 1962-63 was to the tune of Rs. 39,058. The Income-tax Officer held that those were speculative transactions which were prohibited by the Forward Contracts (Regulation) Act, 1952, and that the loss suffered from the illegal speculative transactions could not be deducted from the other income. The Income-tax Officer, therefore, disallowed the loss claimed by the assessee-company for the assessment year under reference.
Gujarat High Court Cites 14 - Cited by 2 - Full Document
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