Reduce tax on short term profits

Transactions work in a funny way when taxes are involved. Here's a demonstration:
Here's how to lower your average buy price of a share with tax benefits:
Assume you have bought a share of scrip A @ 700. Now the share has fallen to 600 within a week/month. Assume you buy 1 more share, this time @600 and also sell one share at the same price.
Looking from a layman's/superficial perspective, these 2 transactions are wasteful and costs are involved (brokerage and taxes on the transaction) as no useful purpose has been solved.

Now lets look at this from the tax perspective:
As shares sold is always in FIFO (First in first out) in India, your would have effectively sold the first share at a loss of 100(sell@600- buy@700). This gives rise to a short term loss of 100 which is adjustable against other short term profits. Assume you have made a 100 short term profits in some other transactions. Then, your net tax payable is 15% * (100-100) = 0. So you have effectively saved 15% taxes on the amount of losses if you have profits elsewhere in other transactions. Now, your effective by price of A is also 600 (the price of the second share you bought). The lower buy price will help you break even and make profit faster.

Lets extend the case. Assume that after a year of buying the second share, the price has reached to 630. If the 2 seemingly dummy transactions had been done, then you would have saved 15 in short term taxes by adjusting against other short term profits and when you sell this at 630, you make a long term profit of 30 (Sell@630 - Buy@600). And since long term equity capital gains is taxed at 0%, the total profit/loss you would have made is -100+15+30 = -55.
If these two dummy transactions had not taken place, your buy price would have been 700 and sell price would be 630, meaning a loss of 70. Note that long term losses are not adjustable against anything.
So, you can effectively reduce your losses or taxes and also make more profits by taking an immediate short term loss and entering into a counter transaction by buying an equivalent amount at the same price(assuming you have short term profits).
This is not only applicable for buying and selling at the same price, it is also very much applicable if you bought the second share at at a rate less than the selling of the first share.