https://www.taxtmi.com/caselaws?id=467424 Dispute concerned whether related-party option agreements were sham and whether option proceeds should be taxed as the transferor's income, and whether section 14A disallowance exceeded exempt income. ITAT applied principle that reasonableness of interparty option pricing is judged by market conditions at the time of agreement and not by substituting later sale prices, noting benchmarking to subsequent realizations suffers from hindsight bias; option prices matched prevailing stamp duty ready-reckoner values and comparable third party arrangements existed, so substitution was unjustified and the addition was reversed. ITAT also sustained limitation of the Rule 8D/section 14A disallowance to exempt income. en-us Wed, 03 Aug 2022 00:00:00 +0530 Wed, 18 Mar 2026 12:07:51 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=467424 Dispute concerned whether related-party option agreements were sham and whether option proceeds should be taxed as the transferor's income, and whether section 14A disallowance exceeded exempt income. ITAT applied principle that reasonableness of interparty option pricing is judged by market conditions at the time of agreement and not by substituting later sale prices, noting benchmarking to subsequent realizations suffers from hindsight bias; option prices matched prevailing stamp duty ready-reckoner values and comparable third party arrangements existed, so substitution was unjustified and the addition was reversed. ITAT also sustained limitation of the Rule 8D/section 14A disallowance to exempt income. Case-Laws Income Tax Wed, 03 Aug 2022 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=467424