ITAT allowed assessee's claim for Rs. 707.56 crores loss arising...

ITAT allowed assessee's claim for Rs. 707.56 crores loss arising from Harshad Mehta scam during FY 1991-92. Assessee paid SBI for back-to-back securities transactions, but SBI fraudulently credited proceeds to broker's account without delivering securities to assessee. Tribunal held the loss constituted allowable business expenditure in the relevant assessment year, being attributable to fraudulent activities by employees. Following precedent in J&K Bank Ltd case and Tribunal's earlier decision in assessee's own matter, ITAT determined loss was deductible business expense rather than capital loss. Addition made by revenue authorities was deleted and assessee's grounds were allowed. Loss deemed allowable in year of occurrence despite fraudulent circumstances surrounding transaction.

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