Case Law Details
ACIT (OSD) Vs. Deepakbhai N. Parikh (ITAT Ahemdabad)
ITAT held that assessee should be allowed set off of long term capital loss from sale of shares off market against the long term capital gain on sale of land as they have been entered within the permissible four corners of law and the modus operandi of the assessee is not that of tax evasion but of tax planning.
Assessing officer has made the dis allowance of set off of long-term capital loss on sale of sales of M H Mills and industries Ltd. merely because the transaction has been done off market which has resulted in the long term capital loss. The gift of shares of the said company received by the appellant from his close relatives has been accepted by the assessing officer as genuine and not bogus. The transaction of sale of shares of M H Mills and industries Ltd. to third-party has also been accepted by the assessing officer as genuine and not bogus. When the statute provides alternative options of taxation in the case of long-term capital gain, the assessee has a legal and valid right to choose any of the options and faxing authority cannot question why a particular option has been chosen and not the other one. .In the present case of the appellant, he’s having two legal options available for selling the shares. “On market” and “off market” and he had choose the “off market” option while evaluating the tax implication of it. The assessing officer cannot question the appellant on the decision taken by him which is legal, valid and within four corners of law. In my considered view, there seems no colorable device in the transactions of sale of shares of M H Mills and Industries Ltd. off market by the appellant which has eventually resulted in the loss. assessing officer has not brought on record any cogent material evidence in support of the allegation that the transaction of sale of shares of M H Mills and industries Ltd. off market is a colorable device to avoid the fax.
In view of the detailed discussion held above, the dis allowance made by the assessing officer for set off of long-term capital loss on sale of shares of M H Mills and industries Ltd. is not justified and therefore is deleted.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
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