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2016 (11) TMI 1469 - AT - Income TaxAddition on account of long term capital loss on sale of Shares - Held that:- As per section 108 of the Companies Act, 1956 off market transactions are permissible by Security Exchange Board of India. All the transactions entered into by the assessee are within the frame work of law and cannot be termed as a colourable device to evade tax rather it is assessee’s right of tax planning which he has used to reduce his tax liability by entering into all the transactions permissible by law. We, therefore, find no reason to interfere with the order of ld. CIT(A). Accordingly this ground of Revenue is dismissed. Disallowance u/s 14A of the Act r.w.r 8D - Held that:- Certainly provisions of section 14A of the Act can be applied to the assessee only if there is some expenditure incurred by assessee in relation to the income which does not form part of the total income and such expenditure have been claimed by the assessee against the taxable income. In other words if the assessee has been carrying on any business activity and has claimed certain expenditure against the revenue or has claimed expenditure under income from other sources u/s 57 of the Act then Revenue would have a case for calculating the disallowance. However, no such facts are existing in the case of assessee as assessee has not claimed any expenditure against salary income, or income from other sources as verifiable from the computation of income placed at page 10 to 14 of the paper book. We are, therefore, of the view that no disallowance is called for u/s 14A of the Act and no interference is called for in the order of ld. CIT(A). 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.
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