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2017 (3) TMI 1327 - AT - Income TaxUpholding valuation loss on stock of shares as speculation loss u/s.73 - Held that:- We find that the assessee had claimed loss on account of valuation of closing stock on the last date of AY, that the AO invoked the provisions of section 73 and held that the transactions entered into by the assessee were of speculative nature, that the FAA confirmed his order, that both the authorities did not consider the argument about the exception to the explanation to section 73, that the assessee had earned profit of ₹ 2,20,67,126/-, that it had STCG on sale of mutual funds to the tune of ₹ 2.68 crores. It is a fact that shares traded by the assessee were not of any of the good companies.The assessee had in the normal course of business purchased the shares. Because of the turmoil in the share market in the year under consideration the assessee suffered huge loss.It was valuing its stock on cost or market price whichever was lower and had accordingly valued the shares.The resultant loss, in these circumstances, cannot be considered speculative loss as held by AO and confirmed by FAA.In our opinion facts of Lokmat case [2010 (2) TMI 94 - BOMBAY HIGH COURT ] are applicable to the facts of present case. - Decided in favour of assessee Penalty u/s 271(1)(c) - Held that:- While deciding the appeal filed by the assessee we have held that transaction entered into by the assessee were not of speculative nature that the loss was allowable as business loss. Therefore, penalty order would not survive.- Decided in favour of assessee
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