Speculation Profit can be set off against carried forward speculation losses first

[CiC]

CIT Vs. Ashok Mittal, ITA No. 26/2013, Judgment delivered on: 07.02.2013, High Court of Delhi

First to setting-off the carry forward speculative losses against the speculative profit and then set-off the business losses to the extent of the balance speculation profit and other income.

As per the Boart Circular No.23D of 1960 dated 12.9.1960 issued by the Central Board of Direct Taxes which conceded that speculation losses carried forward from previous years may be first set off against the speculation profits before being set off against any other current profits, if that procedure is more beneficial to the assesses and decision of Hon’ble Calcutta High Court in the case of CIT vs. New India Investment Corporation Ltd. (1994) 205 ITR 618, referred by the Ld. Commissioner of Income Tax (Appeals), it is evident that carried forward speculation losses have to be adjusted against the speculation profit before allowing any other loss to be adjusted against those profits and other incomes.