Deduction Allowed for Loss on Sale of Pledged Shares to Satisfy Sister Concern’s Dues

CIT Vs Star Investments Pvt. Ltd (Madras High Court) Madras High Court held that pledging of shares for the enable sister concern to avail loan is certainly an activity undertaken in the course of business. Accordingly, sale of shares thereon to satisfy dues of defaulting sister company is entitled for deduction of business loss/ debt. Facts- The present petition has been preferred by the revenue mainly contesting that Tribunal has erred in holding that the assessee is eligible for deduction of bad debts of Rs.8,46,97,280/- when the transaction is not in the nature of loan between the parties....