derivatives loss set off against business income

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Jitendra (Querist)
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04 May 2011 My father was dealing in derivatives (Stock Futures & Stock Options) had incurred a loss of 73,689/-for the assessment year 2010-11, he also had business income from LIC Commission and did not set off the loss from derivatives against this business income.

Can he set off his carried forward derivatives loss against his business income from LIC Commission in the assessment year 2011-12.

Can any body suggest a way out

Aditya Maheshwari

Aditya Maheshwari (Expert)
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04 May 2011 Assessee does not have any option - Section 72 provides for carry forward of loss only when such loss cannot be set off against income under any other head. Under the Act, there is no provision which give option to the assessee to show the profit as income from one source and carry forward the loss from another source of income to the next year - CIT v. Milling Trading Co. (P.) Ltd. [1994] 76 Taxman 389 (Guj.).

Jitendra

Jitendra (Querist)
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04 May 2011 Thanks for the reply.

As per your reply my father can not adjust carried forward derivatives loss against his business income from LIC Commission in the assessment year 2011-12.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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04 May 2011 Has the Intimation received for the last year. if they did not set off the loss then u can set it off in current year. However it is impossible as per my thinking to do such a thing what you have done as the income from non speculation business totally is shown at one place only and hence there cannot be showing income at one place and carryforward loss at other as there is no place for such a thing in the ITR itself.

Jitendra

Jitendra (Querist)
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04 May 2011 I have not received any intimation for the last year.

Also please tell me which ITR should I use for this adjustment.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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04 May 2011 there is no ITR for this as it is illegal.