2014 (4) TMI 167

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....by the Assessing Officer in the total turnover for the computation of deduction u/s.80HHC of the Act? B. Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by CIT(A) in directing to allow the claim of Long Term Capital Loss of Rs.44.01 lakhs made by the Assessing Officer on sale of units of Mutual Funds?" 2. In so far as Question [A] is concerned, it is an admitted position that the same is covered by the judgment of this Court dated 3.12.2013 in the case of Commissioner of Income-tax vs. Pogagen AMP Nagarsheth Powertronics Ltd. in Tax Appeal No.884 of 2006 In terms of the said judgment, question is answered against the Revenue. 3. Question [B] needs a brief reference. It arises in following ....

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.... " The object of section 94(7) is to curb the short-term losses. Applying section 94(7) in a case for the assessment year(s) falling after 1-4-2002, the loss to be ignored would be only to the extent of the dividend received and not the entire loss. In other words, losses over and above the amount of the dividend received would still be allowed from which it follows that the Parliament has not treated the dividend stripping transaction as sham or bogus. It has not treated the entire loss as fictitious or only a fiscal loss. After 1-4- 2002, losses over and above the dividend received will not be ignored under section 94(7). If the argument of the Department is to be accepted, it would mean that before 1-4-2002 the entire loss would be disa....