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

ITA 353/HYD/2021

AI Insights

The case revolves around the disallowance of a loss amounting to Rs.6,41,12,159/- incurred by the assessee, Smt. Reema Agarwal, from the sale of shares of two companies, Shree Shaleen Textiles Ltd. and SRK Industries Limited, during the assessment year 2014-2015. The Assessing Officer disallowed the loss, questioning the business prudence of the assessee, which was upheld by the CIT(A). However, the Tribunal reversed this decision, emphasizing that the transactions were genuine, conducted through a registered broker on a recognized stock exchange, and the losses were incurred in the normal course of business.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839870 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2014-2015
• Appeal Filed On: 02-09-2021
• Other Referred Cases: CIT-V, Hyderabad v. Smt. Aarti Mittal, Pr. CIT vs. Renu Aggarwal, Pr. CIT vs. Kishore Kumar Mohapatra, PCIT vs. Anupama Mahopatra, PCIT vs. Kuntala Mahopatra, Chandra Prakash Jhunjhunwala, Kolkata vs. DCIT, CC-3(4), Kolkata, M/s. Nicholson Vanijya Pvt. Ltd. vs. ITO, Ward-1(2), Kolkata, PCIT vs. Swati Bajaj
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KUMAR NAIK
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Business income; Capital Gains; Principle of natural justice; Accommodation entries; Earning of tax free income; Maximum Marginal Rate; Penny stocks; Bogus

Judgement Text

" आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G. ACCOUNTANT MEMBER आ.अपी.सं /ITA No.353/Hyd./2021 Assessment Year 2014-2015 Smt. Reema Agarwal, Hyderabad – 500 034. Telangana. PAN AELPA4179F vs. The ACIT, Central Circle-2(3), Hyderabad. (Appellant) (Respondent) िनधाŊįरती Ȫारा /Assessee by: CA P Murali Mohan Rao राज̾ व Ȫारा /Revenue by: Dr. Narendra Kumar Naik, CIT-DR सुनवाई की तारीख/Date of hearing: 22.01.2026 घोषणा की तारीख/Pronouncement: 26.02.2026 आदेश/ORDER 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: Printed from counselvise.com 2 ITA.No.353/Hyd./2021 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 correct and bad in law. 3. The Ld. CIT(A) ought to have appreciated the fact that the above loss of Rs.6,41,12,159/- is incurred in course of regular business of the assessee, purely out of business exigency and the same is allowable. 4. The Ld. CIT(A) ought to have appreciated that the assessee, being a trader in scrips and shares has made all the purchases and sales on BSE which is regulated by SEBI through a registered broker only. 5. The Ld. CIT(A) ought to have considered the fact that the assessee has purchased and sold the shares accordingly through Recognised SEBI which confirms the validity and genuineness of the transactions made by the assessee. 6. The Ld. CIT(A) erred not considering the fact that the share sold were acquired in earlier years and the AO has not doubted the purchase of shares. 7. The Ld. CIT (A) ought to have considered the various evidences filed by the assessee in the form of Bank Statements, Details of shares purchased, Share Bills, Statement of Accounts, Ledger copies about the existence, genuineness of the sales and purchases made during the year under consideration. 8. The Ld. CIT(A) ought to have appreciated the fact that the transactions were done through recognised stock exchange in electronic platform and all transactions were routed through Printed from counselvise.com 3 ITA.No.353/Hyd./2021 DEMAT account and banking channels and Securities Transaction Tax on the above transactions were paid u/s 111A of the Income Tax Act, 1961. 9. The Id CIT(A) ought to have appreciated the fact that the AO has not doubted the purchase of shares in D-MAT Form agency, hence sale cannot be bogus. 10. The Id CIT(A) ought to have appreciated the fact that the sale transaction between the appellant and the other party was not a pre-arranged transaction, hence the AO cannot be deny the same sale transaction. 11. The Ld. CIT (A) erred in not considering the submissions made by appellant which is not correct, is against Natural Justice and is not justified. 12. The Ld. CIT(A) ought to have appreciated that the book value of the shares does not reflect the market price and the assessee had to sell the shares at a very lower price in order to ensure no further loss is incurred. 13. The Ld. CIT (A) ought to have appreciated the fact that there is no mention in the order that there is nexus between the assessee and the party who purchased the share through stock exchange. 14. The Ld. CIT(A) ought to have followed the judgement of jurisdictional High Court in I.T.T.A.No. 490 of 2014 dated 30.07.2014 in the case of CIT-V, Hyderabad v. Smt. Aarti Mittal and ought to have held that the share transactions of the appellant are genuine. 15. The CIT(A) ought to have appreciated the fact that the Ld. AO cannot sit in the arms chair of the assessee. 16. The Ld. CIT(A) erred in enhancing the income of the assessee by an amount of Rs.1,45,00,001 which is beyond the powers of CIT(A). Printed from counselvise.com 4 ITA.No.353/Hyd./2021 17. The assessee may add, alter or modify any other points to the grounds of appeal at any time before or at the time of hearing of the appeal.” 3. The assessee is an individual and earning income from business as well as other sources. The assessee filed her return of income u/sec.139(1) Income Tax Act [in short \"the Act\"], 1961 on 31.03.2016 declaring total income of Rs.47,75,170/-. The case of the assessee was selected for complete scrutiny under CASS. During the course of assessment proceedings, the Assessing Officer noted that the assessee has declared net purchases of Rs.8,03,16,136/- after adjusting loss on sale of two scrips i.e., Shree Shaleen Textiles Ltd., and SRK Industries Limited. The Assessing Officer asked the assessee to furnish details of the transactions relating to the sales of shares of these two companies. The assessee furnished the details of purchase and sales of shares of 03 scrips viz., (i) Amtek Auto Ltd., (ii) Shree Shaleen Textiles Ltd., and (iii) SRK Industries Limited. From the details filed by the assessee, the Assessing Officer noted that the assessee purchased 2 lakh shares of Shree Shaleen Textiles Ltd., @ Rs.69.63ps per share on 13.12.2013, Printed from counselvise.com 5 ITA.No.353/Hyd./2021 out of which, 1 lakhs share were sold on 22.03.2014 @ Rs.17.71per share and thereby, booked loss. Similarly, the assessee purchased 3,78,875 shares of SRK Industries Limited @ Rs.191.65ps per share on 26.12.2013 and the same were sold @ Rs.35.22ps per share on 27.03.2014 and thereby, booked loss. The Assessing Officer also noted that there was split of both the scrips and the trading by assessee was post-split of shares. The Assessing Officer has also considered the book value of the shares before split and after split and then, proposed to disallow the loss by issuing a show cause notice dated 05.12.2016. The assessee filed her submissions on 09.12.2016 and explained that the transaction of purchase and sale of shares were done on the Bombay Stock Exchange [in short “BSE”] which is regulated by Securities and Exchange Board of India [in short “SEBI”] and all transactions were done through a registered broker. It was further stated that book value of the shares does not reflect the price prevailing on the stock exchange on which they are traded. Thus, the assessee has explained that when there is a genuine transaction of purchase and shares, then, Printed from counselvise.com 6 ITA.No.353/Hyd./2021 the outcome of the transaction being ‘profit or loss’ cannot be disallowed. The Assessing Officer did not accept the reply of the assessee and disallowed the claim of loss arising from purchase and sale of shares of these two scrips @ Rs.6,41,12,159/-. The assessee challenged the action of the Assessing Officer before the learned CIT(A) but could not succeed. 4. Before the Tribunal, the learned Authorised Representative of the Assessee has submitted that when the transaction of purchase and sale of shares carried out at the recognized stock exchange are neither disputed nor found to be bogus, then, the loss arising from the transaction cannot be disallowed on the ground that the assessee has not acted prudently. The learned Authorised Representative of the Assessee has further submitted that the transactions are carried out in the normal course of trading on the recognized stock exchange through the registered broker and reflected in the Trading/DEMAT A/c of the assessee from where the assessee subsequently sold these shares. He has pointed out that the Assessing Officer has disallowed the loss incurred by Printed from counselvise.com 7 ITA.No.353/Hyd./2021 the assessee on these transactions only on the ground that the assessee has booked the loss without any business prudence which is not within the jurisdiction of the Assessing Officer as the Assessing Officer cannot pass a Judgment about the business prudence of the assessee and question the business decision of the assessee of purchase and sale of the shares. He has further submitted that the Assessing Officer has not brought any record or material to show that the assessee has booked artificial loss to avoid the tax. Thus, the learned Authorised Representative of the Assessee has submitted that the disallowance of loss incurred by the assessee in the actual and genuine transaction of purchase and sale of shares is not justified and liable to be deleted. He has referred to the annual report and financial statements of these two companies viz., (i) Shree Shaleen Textiles Ltd., and (ii) SRK Industries Limited and submitted that these two companies are active companies and doing their business. Therefore, the existence of these companies is not in dispute. He has also referred to the balance sheet and notes on accounts as part of the annual reports of the two companies Printed from counselvise.com 8 ITA.No.353/Hyd./2021 and submitted that the market price of these two scrips at the stock exchange are also reported in the annual report of these companies and therefore, the assessee has purchased the shares as per the prevailing market price on the stock exchange on the date of purchase and sold the shares at the prevailing market price on stock exchange on the date of sales. Therefore, the transaction of purchase and sales were carried out on the stock exchange and as per the prevailing market price of these two scrips, then the book value of the shares as referred by the Assessing Officer as on 31.03.2013 and 31.03.2014 are not at all relevant to question the market price prevailing on the relevant dates on the stock exchange. The learned Authorised Representative of the Assessee has relied upon the Judgment of Hon’ble Supreme Court in the case of Pr. CIT vs. Renu Aggarwal [2023] 456 ITR 249 (SC) and submitted that the SLP filed by the Revenue was dismissed by the Hon'ble Supreme Court against the Judgment of Hon’ble Allahabad High Court reported in [2023] 153 taxmann.com 578 (Allahabad-HC). He has also relied upon the Judgment of Hon'ble Supreme Court in the Printed from counselvise.com 9 ITA.No.353/Hyd./2021 case of Pr. CIT vs. Kishore Kumar Mohapatra [2024] 162 taxmann.com 5 (SC) whereby the SLP filed by the Revenue against the Judgment of Hon’ble Orissa High Court has been dismissed reported in [2024] 162 taxmann.com 4 (Orissa-HC). The learned Authorised Representative of the Assessee has also relied upon the following Judgments: i. PCIT vs. Anupama Mahopatra [2024] 161 taxmann.com 703 (SC) – SLP filed by the Revenue was dismissed against the Judgment of Hon’ble Orissa High Court reported in [2024] 161 taxmann.com 702 (Orissa-HC); ii. PCIT vs. Kuntala Mahopatra [2024] 160 taxmann.com 608 (SC) - SLP filed by the Revenue was dismissed against the Judgment of Hon’ble Orissa High Court reported in [2024] 160 taxmann.com 567 (Orissa-HC); iii. Order of ITAT, Kolkata Bench in the case of Chandra Prakash Jhunjhunwala, Kolkata vs. DCIT, CC-3(4), Kolkata in ITA.No.2351/Kol./2017, Dated 09.08.2019; iv. Order of ITAT, Kolkata Bench in the case of M/s. Nicholson Vanijya Pvt. Ltd., C/o. RSVPC & Company vs. vs. ITO, Ward-1(2), Kolkata in ITA.No.1856/Kol./2018, Dated 08.03.2019; Printed from counselvise.com 10 ITA.No.353/Hyd./2021 4.1. The learned Authorised Representative of the Assessee has then referred to the statement of account with the stockbroker and submitted that all the transactions are carried out in the normal course of trading on the stock exchange. The payment was made through the bank account of the assessee; the details of which are placed at page nos.60 to 65 of the paper book. Thus, the learned Authorised Representative of the Assessee has submitted that when the transaction of purchase and sale of shares are genuine transactions carried out on the stock exchange in the normal course of trading activity, then, the loss incurred by the assessee on the transactions of two scrips cannot be disallowed. 5. On the other hand, the learned DR has submitted that these two scrips were under the investigation of the SEBI regarding the abnormal fluctuation in the price on the stock exchange and the SEBI has imposed the penalty on the Promoters/Directors of these two companies for violation of the disclosure under Clause-35 of the listing agreement to BSE. Thus, these two scrips were tainted scrips, and assessee Printed from counselvise.com 11 ITA.No.353/Hyd./2021 has booked the huge loss which is not a genuine loss, but the timing of the transaction clearly shows that these losses are booked to adjust against the profits in respect of Future & Option [in short “F & O”] transactions during the year. Therefore, the assessee bas booked these losses on the trading of these two scrips with the sole motive and view to avoid the tax on the profits on the F & O transactions of the assessee. The learned CIT(A) has analysed the facts relating to these issues in para nos.7.2 and 7.3 of the impugned order wherein it was observed that the penny stock transactions are being used for the purpose of money laundering activity wherein shares of no value or negligible value are purchased and held for more than 12 months and transferred thereafter at an exorbitant price to convert the same into tax exemption long term capital gains u/sec.10(38) of the Act. The shares of Shree Shaleen Textiles Ltd., and SRK Industries Limited were selected by the assessee for the purpose of creating bogus business loss and set off the same against the business income of the assessee derived from purchase and sale of Futures. This particular modus operandi adopted by the Printed from counselvise.com 12 ITA.No.353/Hyd./2021 assessee has been subject matter of the investigation by the Authorities including SEBI. Therefore, the concept of “substance over form” and “lifting corporate veil” should be pressed into action. The learned CIT(A) has also verified various parameters and even with the basic parameters of the stocks in question are negative and in normal course, such poor parameters would not inspire confidence in prospective investors to venture into the investment in such stock. The assessee carried out transactions in such stocks knowing very well that the same were worthless penny stocks but for availing the benefit of creating bogus business loss and set off the same against regular business income. He has relied upon the Orders of the authorities below and submitted that the sole motive of doing the transaction of purchase and sale in two scrips is nothing but to create bogus loss which could be set off against the profit of the assessee from F & O transactions and to avoid the income tax. The learned DR has relied upon the following decisions: Printed from counselvise.com 13 ITA.No.353/Hyd./2021 (i) PCIT vs. Swati Bajaj [2022] 446 ITR 56 (Calcutta- HC); (ii) Order of ITAT, Chennai in the case of M/s. Pankaj Agarwal & Sons (HUF), Chennai & Others vs. ITO, Non-Corporate Ward-10(3), Chennai in ITA. No. 1413/CHNY./2018 etc. Dated 06.12.2018; 5.1. He has also referred to various other decisions wherein the transactions in the penny stocks were held to be artificial and non-genuine transactions. 6. We have considered the rival submissions as well as relevant material on record. The Assessing Officer has considered this issue in Para no.3 of the assessment order as under: “3. During the course of assessment proceedings, it was noticed that the assessee has declared net purchases of Rs 8,03,16,136/- after adjusting losses on sale of two scrips le Shree Shaleen & SRK Industries Ltd. The assessee was accordingly required to furnish details of the transactions related to sale of shares. The assessee furnished the details as under: Printed from counselvise.com 14 ITA.No.353/Hyd./2021 Printed from counselvise.com 15 ITA.No.353/Hyd./2021 Printed from counselvise.com 16 ITA.No.353/Hyd./2021 6.1. Thus, it is clear that the Assessing Officer has proceeded by taking the book value of these two scrips as on 31.03.2013 and 31.03.2014 prior and post-split of shares. It is pertinent to note that the shares of these two companies viz., (i) Shree Shaleen Textiles Ltd., and (ii) SRK Industries Limited were split up from the face value of Rs.10/- to Rs.2/- and face value of Rs.10/- to Rs.5/-, respectively, as on 31.03.2013. The transaction in the case of the assessee as reflected from the details are carried out on 26.12.2013 as purchase and 22.03.2014/27.03.2014 as sales of shares of these two scrips. As a matter of fact, there was difference in purchase price and sale price which has resulted losses on trading of these two scrips. It is pertinent to note that the purchase transactions of these two scrips were taken place on 26.12.2013 and the sale transactions were after about 03 months on 22.03.2014 and 27.03.2014, respectively. Therefore, it is not a case of purchase and sale of shares within a day or two but there is a gap of about 03 months in purchase and sale of these transactions. The Assessing Officer has not disputed the prevailing market price of these Printed from counselvise.com 17 ITA.No.353/Hyd./2021 two scrips on the Bombay Stock Exchange [BSE] on relevant dates when the assessee has purchased on 26.12.2013 and sold on 22.03.2014 and 27.03.2014 respectively. This fact is also reflected from the annual reports of these two companies as under: Printed from counselvise.com 18 ITA.No.353/Hyd./2021 Printed from counselvise.com 19 ITA.No.353/Hyd./2021 Printed from counselvise.com 20 ITA.No.353/Hyd./2021 6.2. Therefore, the monthly prevailing high and low price at BSE of these two scrips is also reported in the annual reports of these companies, which is also not disputed by the Assessing Officer rather the Assessing Officer has given the reasons for disallowing the loss as the assessee booked the loss without any business prudence. The Assessing Officer cannot sit in the arm chair of the business person to take a decision and question the prudence of the assessee. It is also pertinent to note that to avoid tax at maximum marginal rate @ 30%, why one should book a bogus loss of Rs.6.41 crore. We further note that all the transactions were carried out in the regular course of trading at BSE through the registered broker. The Assessing Officer has not disputed the acquisition of these shares by the assessee and reflected in the Trading/DEMAT A/c of the assessee against the consideration paid through banking channel as evident from the bank account statement filed by the assessee placed at Page nos.60 to 65 of the paper book. The assessee has also produced the assessee’s ledger A/c in the books of the broker as well as the account statement reflecting the holding of the Printed from counselvise.com 21 ITA.No.353/Hyd./2021 shares by the assessee after the acquisition in the month of December 2013 and sale of the same towards the end of March 2014. When the transactions carried out by the assessee are legal and permissible transaction on the stock exchange, then, the outcome of the transaction whether profit or loss cannot be questioned on the ground of business prudence. It is also matter of record that the assessee has carried out various other transactions of purchase and sale of shares including huge number of F & O transactions which have resulted in profits, therefore, these are not the isolated transaction carried out by the assessee to book the loss. Even otherwise when the transactions are valid and legally permissible transactions, then, the intentional booking of loss by the assessee falls in the ambit of tax planning and not tax avoidance. The assessee can very well manage its affairs and tax planning and if it is found that some of the scrips are going to yield loss, then, booking of the said loss at the fag end of the financial year is part of tax planning to reduce the tax liability. So long the transactions are within the legal parameters and permissible under law, then, the outcome of Printed from counselvise.com 22 ITA.No.353/Hyd./2021 the said transactions will be part of the business activity of the assessee and cannot be treated separately. 6.3. As regards the SEBI investigation and imposition of the penalty, it is a matter of record that the SEBI vide two separate Orders in the case of Shree Shaleen Textiles Ltd., and SRK Industries Limited has found the violation of disclosure on the part of the Promoters/Managing Directors of these two companies under Clause-35 of the listing agreement to BSE and consequently, the penalty was imposed on the Directors and Promoters who were also barred for trading at the stock exchange. The said Orders of the SEBI has no bearing on the transaction of purchase and sale of shares by the assessee on the stock exchange through a registered broker. The Assessing Officer has not brought any fact or material on record to show that the assessee has not carried out these transactions but artificially booked this loss. The decisions relied upon by the learned DR are all in respect of long term capital gains shown by the assessees from the transaction of purchase and sale of penny stock and claimed as exempt u/sec.10(38) of the Act which were found Printed from counselvise.com 23 ITA.No.353/Hyd./2021 to be bogus transactions or accommodation entries and consequently, the addition was made u/sec.68 of the Act, whereas in the case on hand, the assessee has not claimed any such exempt income rather the transactions are in the nature of trading of these scrips and assessee has booked the business loss. We further note that the learned CIT(A) has also given much emphasis on the decisions which were in respect of transactions carried out in the penny stock and declaration of the exempt income u/sec.10(38) of the Act as per Para nos.7.2 to 7.4 of the impugned order as under: “7.2. At the outset, it is a known fact that penny stock transactions are being used for the purpose of money laundering activities wherein shares of no value or negligible value are purchased and held for more than twelve months and transferred thereafter at an exorbitant price to convert the same into tax exempt LTCG u/s 10(38) of the Act. In certain cases, such shares are bought at an exorbitant price and held for less than twelve months and transferred thereafter at an abnormally low price so as to arrive at huge amount of business loss or STCL, as the case may be. Further, the said loss is adjusted against other taxable income of the assessee under the head business or capital gains, as the case may be. 7.3. In the instant case, the assessee has selected the shares of M/S, SRK Industries Limited and Mis. Shree Shaleen Textiles Limited, for the purpose of creating bogus business loss Printed from counselvise.com 24 ITA.No.353/Hyd./2021 and set off of the same against business income of the assessee derived from purchase and sale of Futures. This particular modus operandi adopted by the assessee has been subject matter of investigation by various authorities including Income Tax Dept, SEBI etc., In respect of Income Tax cases, various courts have held in favour of department observing that penny stock transactions should be judged by applying the \"theory of preponderance of probabilities\" in place of paper evidence furnished by the assessee. Also, the concepts of \"substance over form\" and \"lifting corporate veil\" should be pressed into action in order to understand the actual intention of the assessee behind entering into transactions through penny stock. All these issues and concepts are discussed with the help of case laws in the subsequent part of the order. 7.4. At the outset, as seen from the grounds of appeal and submissions made thereof, the assessee has tried to put across his view point by way of producing paper evidence which cannot be accepted on face of it without considering the exact nature of transactions and the purpose for which the assessee indulged in such transactions. In view of this, it is imperative to analyse whether the assessee has adduced adequate evidence to prove the genuineness of the transactions with regard to trading in penny stocks which resulted in generation of huge amount of loss which was set off against taxable business income derived from trading in Futures.” 6.3. In the case in hand when the shares were purchased by the assessee @ Rs.69.63ps and Rs.191.65ps per share respectively, it cannot be considered as penny stock. There is no such definition of penny stock. However, Printed from counselvise.com 25 ITA.No.353/Hyd./2021 the market price of a share below Rs.10/- is considered in the trader’s parlance as penny stock. Therefore, the whole basis of confirming the disallowance while passing the impugned order by the learned CIT(A) is irrelevant for the facts of the case in hand where the genuineness of the transaction is not at all doubted by the Assessing Officer and further nothing has been brought either by the Assessing Officer or by the learned CIT(A) to show that the assessee has artificially booked the loss in question without doing the actual transaction of purchase and sale of shares. We find from the record that the assessee produced all the relevant records in support of the transaction of purchase and sales as well as the purchase/sales price and the prevailing price on the relevant dates of purchase and sale of shares on the stock exchange. It is not the case of the Revenue that the assessee is a party and played a role in manipulation of the market price on the stock exchange of these two scrips. Accordingly, the assessee has established her claim which is duly substantiated by the evidence brought on record that these transactions are real transactions carried out by the assessee Printed from counselvise.com 26 ITA.No.353/Hyd./2021 in the normal course of trading on the stock exchange at the prevailing price on the relevant dates of purchase and sales and therefore, the loss incurred by the assessee from these transactions cannot be held as artificial or bogus loss. Even if assessee has acted in an un-prudent manner the same cannot be a reason or ground to disallow the loss actually incurred by the assessee. Hence, we are of the considered opinion that the Assessing Officer has disallowed the loss incurred by the assessee without any basis and merely on conjectures and surmises lacking any substance. Accordingly, the addition made by the Assessing Officer on account of disallowance of the loss is deleted. 7. In the result, appeal of the Assessee is allowed. Order pronounced in the open Court on 26.02.2026. Sd/- Sd/- [MANJUNATHA G.] [VIJAY PAL RAO] ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 26th February, 2026. VBP Printed from counselvise.com 27 ITA.No.353/Hyd./2021 Copy to : 1. Smt. Reema Agarwal, Hyderabad – 500 034. C/o. P. Murali & Co. Chartered Accountants, 6-3-655/1/3, Somajiguda, Hyderabad - 500 082. 2. The ACIT, Central Circle-2(3), Hyderabad. 3. The CIT(A)-6, 6A, IT Towers, AC Guards, Hyderabad. 4. The Pr. CIT-6, Hyderabad. 5. The DR, ITAT, “B” Bench, Hyderabad. 6. Guard file. BY ORDER Printed from counselvise.com VADREVU PRASADA RAO Digitally signed by VADREVU PRASADA RAO Date: 2026.02.26 13:02:50 +05'30' "