2010 (3) TMI 730

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....n account of loss claimed in respect of Tata Mutual Fund (Tata Index Nifty Plan)." 2. At the time of hearing before us, it is submitted by the learned Departmental representative that as per the provisions of section 94(7) of the Income-tax Act, as it stood at the relevant time, if the assessee sold a unit within the period of three months after its purchase, the loss arising therefrom is to be disallowed ; that the assessee purchased the unit on November 25, 2003 and sold the same on February 25, 2004. Thus, the sale was within the period of three months from the date of purchase ; that the Commissioner of Income-tax (Appeals) held that the sale was after 92 days from the date of purchase and therefore it was not within the period of th....

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....ay the conditions prescribed under section 94(7) are not satisfied and the Commissioner of Income-tax (Appeals) rightly deleted the disallowance of the loss. 3. We have carefully considered the arguments of both sides and perused the material placed before us. The Commissioner of Income-tax (Appeals) has discussed the facts and legal issues as under : "Counsel for the appellant further relied on the following definition of 'month' as interpreted in judicial pronouncements and law lexicon : (i) The word 'month' occurring in section 271(1)(a) must be taken to mean a period of 30 days CIT v. Laxmi Rattan Cotton Mills Co. Ltd. [1974] 97 ITR 285 (ii)  The term 'month' refers to span of time between two dates of two continuous mo....

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.... consideration of the same, I find favour with the contention of the appellant that the Assessing Officer was not justified in invoking the provisions of section 94(7) on the facts of the case and resultantly disallowing the loss of Rs. 21,65,988 claimed by the appellant in respect of redemption of Units of Tata Mutual Fund (Tata Index Fund Nifty Plan). It is not a matter of dispute that the period of holding of the units between the record date (the date of declaration of dividend) and the date of redemption is 92 days. The question for consideration is whether said period of 92 days should mean 'the period of three months' as referred to in section 94(7). The learned authorised representative has rightly pointed out that as the provisions....