The Tribunal set aside the disallowance of short-term loss ...

Tax Dept. loses appeal on disallowance of short-term loss on shares treated as stock-in-trade.

Case Laws     Income Tax

September 24, 2024

The Tribunal set aside the disallowance of short-term loss claimed by the assessee in the Profit and Loss Account, holding that the shares were acquired under a normal business transaction and can be treated as stock-in-trade. The High Court held that u/s 260-A of the Act, it could entertain an appeal only if it involves a substantial question of law. In the present case, the question raised by the Revenue is not a substantial question of law but a question of fact. The Revenue did not file an appeal before the Tribunal regarding the colorable device or genuineness of the transaction or the allowance of loss. The substantial question of law raised by the Revenue emanates from the order of the Commissioner of Income Tax (Appeals), not the Tribunal's order. The Revenue did not raise the issue of the genuineness of the transaction or colorable device before the Tribunal. Therefore, the High Court is not inclined to interfere with the Tribunal's order and answered the substantial question of law raised by the Revenue against them and in favor of the assessee.

View Source