1.  THE COMMISSIONER OF INCOME TAX, MUMBAI Vs SHRI BHARAT R RUIA (HUF), MUMBAI, Income Tax Appeal No. 1539 OF 2010, Date of Order : Dated: April 18, 2011  HIGH COURT OF BOMBAY

Whether the loss incurred from the derivative transactions carried on, on a recognized stock exchange during the year 2003-04 would constitute loss from speculative transaction as contemplated u/s 43(5) of the Act

The exchange traded derivative transactions carried on by the assessee during AY 2003-04 are speculative transactions covered u/s 43(5) of the Act and the loss incurred in those transactions are liable to be treated as speculative loss and not business loss.

Whether the clause (d) inserted to the proviso to Section 43(5) has retrospective effect.

Clause (d) inserted to the proviso to Section 43(5) with effect from 1/4/2006 is prospective in nature.

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2.  DEPUTY COMMISSIONER OF INCOME TAX 17 (3), MUMBAI Vs SHRI SHANTILAL J SHAH, ITA No. 4085/Mum/2009, Assessment Year: 2004-2005 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI 'E' BENCH, Date of Order : 04/03/2011

Whether it is necessary that the fair market value of a property burdened with tenancy rights should remain constant.

It is a common knowledge that tenanted property fetches very low value and assessee might have been able to purchase the property little cheap and the discount on such distress sale may go up even upto 20% to 30%. However, at the same time the property was purchased on 31-10-1979 and, admittedly, even on 1-4-1981 the property remained tenanted only. On a specific query by the Bench, the counsel of the assessee admitted that none of the tenants had left the property as on 1-4-1981, therefore, there was hardly any chance of appreciation; it would be fair to estimate some value and bring the matter to finality. Considering all the facts and circumstances of the case, the fair market value of the property as on 1-4-1981 would be Rs.2,50,000/-. Therefore, the AO is directed to adopt the value of the property at Rs.2,50,000/- as on 1-4-1981 for computing the capital gains.

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