Dividend stripping on mutual fund units fails absent section 94 conditions and specific statutory authority.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Dividend stripping on mutual fund units: the ITAT held that dividend could not be treated as a return of capital or deducted from cost of acquisition without a specific statutory basis. Section 94's anti-dividend stripping rule applies only when its conditions are cumulatively satisfied; here, the required purchase and sale timing conditions were not both met, so the provision was inapplicable. General survey findings and alleged SEBI violations, without material linking the assessee to manipulation, did not justify branding the transaction as sham. The addition was deleted on merits.....