Loss Arising Out Of Sale Of Government Securities Is A Trading Loss: ITAT
Live LawThe Visakhapatnam Bench of the Income Tax Appellate Tribunal held that the loss arising out of the sale of government securities is a trading loss. Because the assessee did not disclose the sale and purchase of government securities in the P&L Account, the loss incurred as a result of the sale of government securities held as investments should be treated as a capital loss rather than a business loss. The assessee contended that the government securities were held under the category of "Available For Sale" and hence the loss after adjustment of the reserves already created in the earlier years is being debited to the P & L Account of the current year. In view of that, we find merit in the claim of the assessee that the loss arising out of sale of Government Securities is of trading loss notwithstanding the securities are grouped under the head investment owing to the prescribed format of the RBI.