ITAT Allows Real Estate Businessman to Set Off Rs 34.21 Lakh F&O Loss

A real estate businessman who incurred losses of Rs 34.21 lakh in futures and options (F&O) trading received an income tax notice after the Assessing Officer refused to allow the losses to be set off against his regular business income. The AO invoked the Explanation to Section 73 of the Income Tax Act, classifying the F&O losses as speculative in nature. The assessment also relied on the Delhi High Court ruling in CIT v. DLF Commercial Developers Ltd. to support the disallowance. The matter was subsequently taken up before the Income Tax Appellate Tribunal (ITAT), which examined whether the set-off should be permitted. The ITAT ultimately ruled in favour of the taxpayer, providing relief on the treatment of F&O losses against business income.