2025 (7) TMI 1358 - AT - Income Tax

Disallowance of set off of losses - short term capital loss with corresponding gains - resultant gain from four companies and the resultant Loss from Midland Poly is nearly the same amount so that the assessee does not have to pay anything. It appears that these are all appears to be accommodation entries - HELD THAT - Lower authorities have held the assessee have derived short term capital gains from sale of shares in various entities It is crystal clear that both the learned lower authorities have more gone by quantum of the impugned claim than having arrived at any specific material thereby holding the set off claim as non-genuine. Accordingly find no merit in the impugned disallowance of the assessee s set off of loss made by the learned lower authorities which is hereby deleted. Assessee s appeal is allowed.

Summary

The Appellate Tribunal (ITAT Delhi) in the appeal for Assessment Year 2014-15 reviewed the disallowance of set off of short-term capital losses against gains by the assessee. Both lower authorities had held that the assessee derived short-term capital gains of Rs. 10,91,096/- and denied set off of corresponding losses of Rs. 12,15,050/-, reasoning that these were "accommodation entries" as stated in para (xvi) of the assessment order: "The assessee has earned an overall gain... and shown loss... The resultant gain... and the resultant Loss... is nearly the same amount so that the assessee does not have to pay anything. It appears that these are all appears to be accommodation entries." The Tribunal found that the lower authorities relied solely on the quantum of the claim without any specific material to hold the set off as non-genuine. Consequently, the Tribunal held that the disallowance lacked merit and deleted the impugned order, allowing the assessee's appeal.