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2017 (5) TMI 917 - AT - Income TaxShort term capital loss on sale of shares - disallowance of claim as sham transaction - speculation loss - Held that:- The transaction of purchases and sales of shares entered in to by the assessee cannot be held to be sham. We have also perused the orders of the ld CIT (A) where in the transaction is held to be speculative in nature and therefore it has been held that these transactions are not sham. Hence, we reject the reasons assigned by the ld AO. In the present, case it is not held that assessee has purchased the shares as a dealer and subsequently the shares were sold as the plans for which shares have been purchased could not be fulfilled. There is no intention imputed for speculation. Assessee being a company can invest in the shares as it has already made huge capital gains both short term and long term which are not disturbed so far the head of the taxability s concerned. Actual delivery is taken and given. We are not in a position to hold that to the impugned transactions provision of explanation to section 73 applies. Therefore, we also cannot uphold the order of the ld CIT (A). In the result we allow ground no 2 of the appeal of the assessee accordingly holding that revenue has failed to establish that transactions are sham and merely book entries and further the explanation to section 73 does not apply to the facts of the case thereby directing the ld AO to allow the short term capital loss to be carried forward.
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