2026 (7) TMI 413

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.... Act, 1961 (in short 'the Act'). 2. Assessee has raised following grounds of appeal : "The following grounds are taken without prejudice to each other - On facts and in law, 1] The Id. CIT(A) erred in confirming the disallowance of short-term capital loss of Rs. 6,16,36,637/- on sale of shares on the ground that the said loss incurred by the assessee was sham and hence, the same could not be set off against income chargeable under the head capital gain. 2] The Id. CIT(A) erred in holding that the assessee had resorted to tax planning by claiming short term capital loss on sale of shares of companies of Rs. 6,16,36,637/- and in view of the decision of Hon'ble Supreme Court in the case of Mc Dowell &....

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....he year under consideration and hence, there was no reason to confirm the disallowance of the short term capital loss and accordingly, the same may kindly be allowed to the assessee while computing her income. The appellant craves leave to add, alter. amend or delete any of the above grounds of appeal." 3. Brief facts of the case are that the assessee is an individual and filed return of income for A.Y. 2015-16 on 31.08.2015 declaring income of Rs. 1,79,71,570/- which is processed u/s. 143(1) of the Act on 22.02.2017. Thereafter, case selected for Limited Scrutiny under CASS followed by validly servicing statutory notices and assessment proceedings u/s. 143(3) of the Act carried out wherein ld. Assessing Officer after considerin....

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....f Equity shares. We note that ld.Assessing Officer has disallowed short term capital loss of Rs. 10,47,63,827/- however, ld.CIT(A) allowed the loss on sale of mutual funds incurred at Rs. 4,31,27,190/- and for the remaining loss incurred from sale of Equity shares of Infosys, Tech Mahindra, HCL Technologies, ld.CIT(A) has not allowed the claim of short term capital loss observing as follows : "5. Discussion and appellate decision: The contention of the appellant have been examined. It is a common thing that investors mainly indulge in bonus stripping as a mechanism to evade income taxes. Bonus stripping is a situation when purchase or sale of units of a mutual fund is transacted in a manner, which would result in short ter....