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TMI Blog2012 (9) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... as not only used two different terms namely “securities” and “units” in Section 94(7)(b)(i) and 94(7)(b)(ii) but has dealt with them separately providing different minimum periods of holding for “securities” and “units”. It is settled position in law that Parliament would not have used words in vain and a construction which renders redundant any part of the statute must be avoided. Therefore, units would be governed by the provisions in respect thereof in Section 94(7)(b)(ii). A view to the contrary would render the provisions of Section 94 relating to units otiose. Further, there is no warrant to read the meaning of the word securities as defined in the Securities Contract (Regulation) Act, 1956 to interpret the meaning of the word secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conditions of Section 94(7) of the Act were not fulfilled in the facts of the present case and hence, the same could not be invoked to disallow the legitimate losses incurred? 2) Whether on the facts and in the circumstances of the case the Tribunal was right in law in not appreciating the true and correct interpretation of the term securities in the Act thereby not appreciating that the amendment to Section 94(7) does not hit the transactions carried out by the appellant? 3) For the assessment year 2005-06 the appellant filed its return of income on 30/10/2005 declaring a total income of Rs.7.46 lacs. During the course of scrutiny assessment, the Assessing officer disallowed the short term capital loss on sale of mutual funds uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(7)(b)(ii) of the Act was effective from 1/4/2005. Consequently, the amendment which was effective from 1/4/2005 would cover the period during which the appellant had suffered short term capital loss on the sale of the units. 5) On second appeal before the Tribunal the only contention raised by the appellant-assessee was that the provisions of Section 94(7) (b) (ii) which were amended by the Finance Act (No.2) of 2004 was not retrospective so as to cover the sale of units prior to July, 2004. The Tribunal by its order dated 12/8/2011 upheld the order of the CIT(A) and further recorded that in case the appellant-assessee is aggrieved by the retrospectivity of the amendment the forum to adjudicate such a dispute was not the Tribunal. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or in the manner in which they can be transferred; (d) unit shall have the meaning assigned to it in clause (b) of the Explanation to section 115AB. Section -115AB- (1).......... (2)-------- Explanation- For the purpose this section- (a).......... (b) unit means unit of a mutual fund specified under clause (23D) of section 10 or of the Unit Trust of India; (c)........... (d)........... Section 10-In computing the total income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a mutual fund specified under Section 10(23D) of the Act or of the Unit Trust of India. In view of Explanation (c) to Section 10(123D) of the Act securities would have the meaning assigned to it under the Securities and Exchange Board of India Act, 1992 which in turn has the meaning assigned to it under the Securities Contracts (Regulation) Act, 1956. Under Section 2(h) of the Securities Contracts (Regulation) Act, 1956 securities have been defined to include units under any mutual fund scheme. In view of the above, it is his submission that the capital loss on sale of units would be covered by Section 94(7)(b)(i) of the Act and in such case the units which are in fact securities are required to be kept only for a period of three months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter of CIT v. Tata Chemicals Ltd. reported in 256 ITR 395 has held that in an appeal under Section 260A only a question raised before the Tribunal can be canvassed before the Court. In this case as the question as formulated not having been raised before the Tribunal, no question of law arises for consideration of this Court. On this limited ground alone the appeal can be dismissed as not giving rise to a substantial question of law. 10) Even assuming the appellant is entitled to raise this issue as it involves only a question of law it would make no difference. The submission made by Mr. Sathe that units are included within the meaning of the word securities and therefore, Section 94(7)(b)(i) of the Act is applicable and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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