TaxTMI 
TaxTMI 
2009 (2) TMI 481
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....his stage, we may also point out that in the impugned judgment of the Tribunal there is a reference to a submission made on behalf of the Revenue to the effect that the loss of Rs. 19,67,450 claimed by the assessee could not have been allowed in view of the provisions of section 71(3) of the Act which prohibits the set off of loss against income of the assessee under a head other than "capital gains". We may point out that the Tribunal has noted that the Assessing Officer has himself treated the loss as "business loss" and, therefore, there was no question of applying the provisions of section 71(3) of the Act. Perhaps advisedly the Revenue has neither raised it as a ground before us nor has the same been urged by the learned counsel for the Revenue Mr. R. D. Jolly before us. 4. Coming back to the two issues referred to hereinabove, the learned counsel for the Revenue Mr. R. D. Jolly has contended that both the Commissioner of Income-tax (Appeals) (hereinafter referred to in short as the "CIT(A)") and the Tribunal have misdirected themselves in law in view of the fact that in so far as the first issue is concerned, the said authorities overlooked the fact that the Assessi....
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....2, 2001. Therefore, he concluded that the purchase of the aforesaid units was made onMarch 12, 2001; (ii) the mutual fund seemed to have paid dividend to the assessee in the sum of Rs. 15,65,762 onMarch 12, 2001. But the books of account of the assessee showed the same as having been credited onMarch 15, 2001while the mutual fund as per its statement had re-invested the same onMarch 12, 2001. There was no cheque of equivalent amount on record which the assessee ought to have in the normal circumstances issued to the mutual fund ; (iii) onMarch 12, 2001initially purchased units and those purchased out of the dividend income were redeemed at a value of Rs. 95,98,312. The bank statement furnished by the assessee did not indicate as to when out of the redeemed amount a cheque of Rs. 80,32,550.46 which was received from the mutual fund was deposited by the assessee with the bank. 8. The assessee being aggrieved by the reasoning adopted by the Assessing Officer which, according to him, was contrary to the facts, preferred an appeal to the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) examined the reply of the assessee in deta....
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....gs, the Commissioner of Income-tax (Appeals) came to the conclusion that the transaction was genuine. The Commissioner of Income-tax (Appeals) also rejected the submission of the Revenue with regard to the aspect of "dividend stripping" on the ground that sub-section (7) of section 94 of the Act was not attracted in respect of the assessment year as the said provision was brought on the statute book by virtue of the Finance Act, 2001 with effect from April 1, 2002. 10. Aggrieved by the order of the Commissioner of Income-tax (Appeals), the Revenue preferred an appeal to the Tribunal. The Tribunal sustained the view taken by the Commissioner of Income-tax (Appeals). The Tribunal after examining the order of the Commissioner of Income-tax (Appeals), as well as, the Assessing Officer came to the conclusion that nothing had been brought to its notice to controvert the findings of the Commissioner of Income-tax (Appeals). The Tribunal concluded that the loss was genuine and hence, had to be allowed. The Tribunal concluded that based on the evidence which was placed on record by the assessee and examined by the Commissioner of Income-tax (Appeals) it could not be held that the ....
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.... cheque onMarch 9, 2001the mutual fund encashed the cheque onMarch 12, 2001. There was thus no discrepancy with regard to the date of purchase of units. It has also come on record that onMarch 12, 2001the assessee had received dividend on the said units amounting to Rs. 15,65,762 as per the option given by the assessee while making the application for purchase of units. The said dividend was reinvested to purchase more units. Accordingly, the mutual fund allotted additional units numbering 1,34,631.298 at a value of Rs. 11.63 per unit. This, as per the record, is reflected in the statement of the mutual fund datedMarch 13, 2001. OnMarch 14, 2001, the assessee redeemed both, the units purchased originally and those obtained out of reinvestment of dividend. The assessee on redemption received a sum of Rs. 95,98,312.46. The mutual fund in respect of the redeemed units issued two cheques in the sum of Rs. 80,32,550.46 and Rs.15,65,762. Both these cheques were drawn on ABN Amro Bank and were datedMarch 14, 2001. It has also come on record that the assessee had deposited both these cheques with Punjab National Bank. The second cheque was found credited in the statement of Punjab National....
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....t, it is our view that the Tribunal has put the matter in the correct perspective while rejecting the plea of the Revenue. It is noticed upon a perusal of both the assessment order as well as the order of the Commissioner of Income-tax (Appeals) that no such plea was taken before the two authorities. A perusal of the two orders would also show that there is no material on record based on which the provisions of section 14A of the Act could be invoked. Section 14A provides that for the purposes of computation of total income of an assessee under Chapter IV of the Act no deduction is to be allowed in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. There is no whisper of any expenditure either in the assessment order or in the order of the Commissioner of Income-tax (Appeals) with respect to expenditure which the assessee incurred for earning income i.e., dividends from units which are admittedly exempted under section 10(33) of the Act. Nothing has also been indicated in the appeal which would lead us to believe that there was material which could have been looked into had the Tribunal permitted the....