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<h1>Tribunal allows appeal on short-term capital loss & interest expenditure disallowance</h1> The Tribunal allowed the assessee's appeal regarding the disallowance of short-term capital loss (STCL) and directed the AO to treat the loss as STCL ... - Issues Involved: Disallowance of short-term capital loss (STCL) and disallowance of interest expenditure on loans given to a related concern.Short-term Capital Loss (STCL) Disallowance:The assessee appealed against the disallowance of &8377; 4,73,811/- as short-term capital loss (STCL) by the AO. The shares were sold @ &8377; 15/- per share resulting in a loss of &8377; 33,30,913/-. The breakup value of the shares was &8377; 18/- per share. The AO disallowed the loss as the justification for the sale price was not provided. The assessee argued that capital gains or loss should be determined based on the sale price, not the fair market value. The Tribunal referred to the decision in the case of Rupee Finance & Management (P) Ltd. and held that the loss should be classified as STCL. The AO was directed to treat the loss as STCL under the head of 'capital gains.'Interest Expenditure Disallowance:The revenue appealed against the deletion of the disallowance of &8377; 16,11,254/- made by the AO on account of interest expenditure on loans given to a related concern. The loans were advanced at lower rates from the CC A/c, on which the assessee paid interest @ 9.5% p.a. The AO disallowed the differential interest charged and paid on the loans. The assessee argued that the advances were made in the course of business to enhance the value of products. The ld. CIT(Appeals) held that the advances were made in the course of business, and therefore, the interest paid on the overdraft account cannot be disallowed. The Tribunal upheld the decision of the ld. CIT(Appeals) stating that the advances were made in the course of business, and hence, the disallowance was not justified.In conclusion, the appeal of the assessee was allowed, and the appeal of the revenue was dismissed.
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