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2014 (1) TMI 926 - AT - Income TaxRejection of long term capital loss on shares – Documentary evidences not filed – Held that:- The swapping of shares was approved by an agency of Govt. of India i.e. FIPB and it had approved the ratio of shares to be swapped - to challenge the prudence of the transaction was not proper - even if the transaction was not approved by the Sovereign and it was carried out by the assessee in normal course of its business AO/DRP could not question the prudence of the transaction - Genuiuness of a transaction can be definitely a subject of scrutiny by revenue authorities, but to decide the prudence of a transaction is prerogative of the assessee. A decision as whether to do /not to do business or to carry out / not to carry out a certain transaction is to taken by a businessman - If it is proved that a transaction had taken place, then resultant profit or loss has to be assessed as per the tax statutes – Relying upon Commissioner of Income Tax Versus Salitho Ores Ltd. [2010 (9) TMI 849 - Bombay High Court] - thus, by casting doubt about the prudence of the transaction, members of the DRP had stepped in to an exclusive discretionary zone of a businessman and it is not permissible - Any claim made by the assessee has to be proved by him and assessee cannot escape from the scrutiny by the AO – the AO had given sufficient opportunities to the assessee, but assessee did not furnish requisite information – the matter remitted back to the AO for fresh adjudication – Decided partly in favour of Assessee. Disallowance of set-off of short term capital loss - Transaction Security Transaction Tax paid against short term capital gain arising from non STT transactions – Held that:- The decision in DEPUTY DIRECTOR OF INCOME TAX Versus M/s DWS INDIA EQUITY FUND [2012 (5) TMI 55 - ITAT MUMBAI] followed - Under the provisions of section 70(2), short term capital loss arising from any asset can be set off against short term capital gain arising from any other asset under a similar computation made - merely because the two set of transactions are liable for different rate of tax it cannot be said that income from these transactions does not arise from similar computation made as computation in both the cases has to be made in similar manner under the same provisions – Decided in favour of assessee.
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