|DATE:||(Date of pronouncement)|
|DATE:||March 27, 2009 (Date of publication)|
|Click here to download the judgement (prasad_agents_expl_s_73.pdf)|
Expl. to s. 73 applies to valuation losses as well
Where the question arose whether the Explanation to s. 73 (which deems the loss from trading in shares by a company to be speculation loss) can be confined only to cases where there is manipulation in shares of group companies and whether the loss arising on valuation of closing stock of shares is also covered, HELD:
(i) Though the Circular of the CBDT supports the interpretation that the object of the Expl. to s. 73 is to curb manipulation of group companies’ shares, the scope of the Expl. extends to all companies carrying on business in shares;
(ii) Though the Expl. refers to purchase and sale of shares and not to losses suffered on account of valuation, it applies to valuation losses as well as there is no difference between trading losses and valuation losses.