Acit.,(Osd)-I,Circle-4,, Ahmedabad vs Deepakbhai N.Parikh, Ahmedabad on 7 November, 2016
4.5 On the other hand, the authorized representative of the appellant has submitted
with supporting evidences that the transaction of sale of shares of M.H. Mills &
Industries Ltd. is factual, valid and genuine. All the details in connection with the sale
of the shares of the said company were furnished to the A.O. which has been
verified by him and accepted as genuine. Merely because the sale of the shares
have been done off market, which is one of the valid and legal option available to the
appellant, it can not be said that the transaction is sham or is having colourable
device so as to evade the tax liability. It has been submitted that off market
transactions of sale of shares are regularly carried out in the market and are in
normal in nature. Under the Income tax Act, 1961, Companies Act, 1956 and the the
regulatory framework of SEBI, the off market transactions are permissible and not
prohibited. The appellant has placed on record the copy of the judgment delivered by
Securities Appellate Tribunal, Mumbai in the case of Jatin Manubhai Shah & Others
Vs. Adjudicating Officer, SEBI (Appeal No. 16 of 2010), wherein it has been held that
off market transactions are permissible in law. Accordingly, it has been contended by
the appellant that since off market transactions are permissible under various laws of
the land, no adverse inference is required to be drawn against the appellant in
respect of the off market transactions done by him merely because such off market
transactions have resulted in loss and not gain. When under the Income tax Act,
there are different modes of taxation of long term capital gain available to the
appellant, then he can choose any of the modes of taxation so as to plan his affairs
which is not prohibited by law, but it is strictly as per the provisions contained in the
Income tax Act.