REEMA AGARWAL,HYDERABAD vs. ACIT, CENTRAL CIRCLE-2(3), HYDERABAD

ITA 353/HYD/2021Status: DisposedITAT Hyderabad26 February 2026AY 2014-1527 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance of the loss was made without basis and on conjectures. The transactions were genuine, conducted on a recognized stock exchange at prevailing market prices, and supported by documentary evidence. Even if the assessee's actions were not prudent, it did not justify disallowing the actual loss incurred.

What were the facts?

The assessee incurred a substantial loss of Rs. 6,41,12,159/- from the sale of shares of Shree Shaleen Textiles Ltd. and SRK Industries Limited. The Assessing Officer disallowed this loss, and the CIT(A) upheld the disallowance, citing lack of business prudence and potential for bogus transactions.

What were the issues?

Whether a business loss incurred from the sale of shares on a stock exchange can be disallowed solely on the grounds of imprudence or potential manipulation, when the transactions themselves are genuine and supported by evidence.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 68

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Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad

Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G.

For Appellant: CA P Murali Mohan Rao
Hearing: 22.01.2026

PER VIJAY PAL RAO, V.P. : This appeal by the assessee is directed against the Order dated 29.06.2018 of the learned CIT(A)-6, Hyderabad, for the assessment year 2014-2015. 2. The assessee has raised the following grounds of appeal: 1. “On the facts and in the circumstances of the case the appellate order passed by the CIT(A) is erroneous both on facts and in law to the extent the C order is prejudicial to the interest of the appellant.

2.

The Ld. CIT(A) erred in upholding the order passed by the Ld.AO in making the disallowance of loss on sale of delivery based shares amounting to Rs.6,41,12,159/- which is not cor

The order continues below.

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