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2010 (8) TMI 39 - HC - Income TaxBusiness Loss or speculative loss explanation to section 73 The assessee had pleaded before the AO that the principal business of the assessee was of granting of loans and advances and earning the income therefrom and therefore, the Explanation to Section 73 of the Act would not apply in the case of the assessee. It is in this backdrop that the AO went into the question as to whether the principal business of the assessee was that of lending money and earning the income therefrom. He concluded in the negative, i.e., he held that the principal business of the assessee was not of money lending. The CIT(A) relying upon the judgment of the Supreme Court in the case of K.P. Varghese v. Income Tax Officer, Ernakulam and Anr. 2008 -TMI - 5862 - SUPREME Court] concluded that the principal business of the assessee was that of money lending and allowed the adjustment of losses suffered on account of sale/purchase of shares from other business income. ITAT accepted the order of CIT(A) Held that - that assessee's case fails under exception clauses of Explanation to 73. - principal business of the assessee is money lending is based on cogent evidence and material on record, it being a finding of fact and therefore, it cannot be treated as perverse.
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