Setting-off STCL from Sale of Shares against LTCG is Tax Planning, not Evasion: ITAT backs Assessee

The ITAT backed an assessee’s position that setting off Short-Term Capital Loss (STCL) from the sale of shares against Long-Term Capital Gains (LTCG) was a valid tax-planning strategy, not tax evasion. The case involved a taxpayer who sold shares at a loss and offset the loss against capital gains from other assets. The revenue authorities had disputed this claim, arguing that it amounted to tax evasion. However, the ITAT ruled in favor of the taxpayer, stating that such tax planning strategies are legal and permissible under the Income Tax Act. The ruling emphasizes the legitimacy of offsetting capital losses against gains and provides guidance on acceptable tax planning practices.