Forfeited application money can be claimed as business loss for investment business

Brief Facts of the Case and Question of Law

Brief Facts

The assessee claimed a loss of Rs. 111 per debenture on the sale of debentures of Jindal Iron and Steel Co (“JISCO”) to UTI.  These assessee were shareholders of JISCO, which declared a right issue of secured redeemable non-convertible debentures (NCD) of Rs. 500/- each. The size of the issue was about Rs. 500 crores. The issue opened on 21.11.94 and closed on 19.12.94. Interest @10.5% was payable

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