TaxTMI 
TaxTMI 
2016 (2) TMI 694
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.... motive is to do trading in shares and not earn through appreciation in the value of shares in the changing share market scenario, when I hand over my funds to the Portfolio Manager. 5. In holding that taking help of expert amounts to trading in shares. 6. In disallowing the short term capital loss of Rs. 41,431/-.. u/s 94(7) of the income tax by applying dividend stripping provisions without ascertaining the motive as to tax avoidance. 7. In not allowing loss of Rs. 3489 from Mutual fund to be set off against the Income. With the permission of your honor, the appellant may plead any additional ground /grounds during the course of appeal. 2. First we shall take up appeal No. 6546/2010. The brief fact of the case are that assessee who is an individual, filed his return of income for AY-2005-06 on 25.08.2005 declaring total income of Rs. 17,21,049/-. The return of income was selected for scrutiny u/s 143(2) on 28.08.2006. Statutory notice was served upon the assessee and after giving the opportunity of hearing, the Assessing Officer (AO) has passed the order of assessment, while making the assessment the AO disallowed a sum of Rs. 3914/- u/s 10(33) and Rs. 41,431/- on a....
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....another 188 instances it is within the period of 3 months and that selling of share by assessee was to maximise profit on the amount of money kept at the disposal of institution. 7. The AO further observed that the volume and frequency of the transaction is very high as indicated by him. The AO further observed that assessee has deducted Rs. 3489/- as a loss on or redemption of unit in Frankling Tampelton and the same was not allowed to be set off against the STCG assessed as business income and held that the loss can be carried forward for set of for subsequent years and thus total Rs. 7,31,715/- was treated as STCG as business income along with Rs. 41,431/- which was disallowed u/s 94(7) of the Act. 8. The ld. CIT(A) while dealing with the ground has observed that the assessee is carried out share trading activity through PMS and invested with ASK Raymond James Securities Pvt. Ltd. and Fortis Securities Ltd. and the CIT(A) observed that STCG disclosing the return of income pertains to the buying and selling of share under PMS scheme. The PMS expert professional are involved who are continuously engaged in the trading of share to maximise profits of their and their clients which....
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....eived from North Canera Sarswat Bank as the same is co-operative bank and the income does not fall under the purview of section 10(33) and the same subject to tax, further, the assessee purchased a mutual fund of Birla MIP on 12.04.2004 for Rs. 5,00,000/- and sold the same on 14.12.2004 for Rs. 4,86,702/- and claimed loss of Rs. 16,298/- under the head "Capital Gain". On the other hand, the assessee received a dividend of Rs. 24,350/- and the loss which was not allowed as dividend income was more than the loss occurred. The AO further noticed that the assessee purchased funds of Principle Asset Management Company on 12.04.2004 for Rs. 5,00,000/- and sold on 14.12.2004 on a loss of Rs. 14,074/- and noticed that assessee received dividend of Rs. 24,455/- and the loss was not allowed as a dividend was more than the loss of the assessee and further purchased mutual fund of Tata dividend yield fund on 12.04.2004 for Rs. 5,00,000/- and sold the same on 14.12.2004 on the loss of Rs. 11,059/-. The assessee received dividend of Rs. 17,827/- and on the same ratio not allowed the loss of Rs. 11,059/-, thus a total of Rs. 41,431/- was added to the total income of the assessee under the head ST....
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....ld Fund on 12-04- 2004 for Rs. 5,00,000/- and has sold the same on 14-12-2004 for Rs. 4,88,941/- The assessee has claimed the loss of Rs. 11,059/- on sale of mutual funds tinder the head 'Capital Gains' But it is found that assessee has received dividend of Rs. 17,827/- As per provisions of section 94(7) this loss is not allowed as the dividend earned is more than the loss incurred on sale of mutual fund units. Hence the loss claimed of Rs. 11,059/- is disallowed and added back to the income of the assessee under the head "Capital Gains". 17. We have carefully examined the order of AO and the CIT(A) and we have to see if section 94(7) of I.T. Act is applicable or not, we have noticed that the assessee purchased mutual fund of three different companies on 12.04.2004 and sold on 14.12.2004 on a total loss of Rs. 41,431/-, thus, all the transaction/sale/purchase were made within 9 months, hence, the assessee is not entitle to claim STCL. 18. The finding of the AO which was confirmed by the CIT(A) does not require any interference at our end, resultantly, the finding of CIT(A) are confirmed. 19. The appeal of the assessee on this ground is dismissed. 20. Next ground which is i....