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TMI Blog2014 (5) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... sold by the assessee after enjoying the dividends declared on that - u/s 94, it is a clear case of dividend stripping – the AO is justified in ignoring that loss and bringing to tax the entire amount of short term capital gains without setting off the short term capital loss – the order of the CIT(A) is upheld – Decided in favour of Revenue. - ITA No. 1597/Mds/2009 - - - Dated:- 8-5-2014 - Dr. O. K. Narayanan And Shri S. S. Godara,JJ. For the Appellant : Shri Hari Rao, IRS, JCIT For the Respondent : Shri V. D. Gopal, Advocate ORDER Per Dr. O. K. Narayanan, Vice-President This appeal is filed by the Revenue. The relevant assessment year is 2006-07. The appeal is directed against the order of the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , after earning the dividend declared on those shares. The Assessing Officer therefore held that the transaction leading to suffering short term capital loss is the case of dividend stripping and therefore, hit by Section 94(7). He held that as per Section 94(7), the short term capital loss incurred on the sale of such shares was ignored for the purpose of computing the assessee s income chargeable to tax. Accordingly, the short term capital loss, including the proportionate cost of transaction, was worked out at Rs. 47,78,871/- and the same was ignored and added back to short term capital gains declared by the assessee and as such, the income was determined at Rs. 87,38,801/-. 6. In first appeal, the Commissioner of Income Tax (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 29.11.2005. It is to be seen that the dividends were declared on 25.11.2005 and received by the assessee on 29.11.2005 itself. It is clear therefore that the shares resulted in a loss were sold by the assessee after enjoying the dividends declared on that. As provided under Section 94, it is a clear case of dividend stripping. As such, the Assessing Officer is justified in ignoring that loss and bringing to tax the entire amount of short term capital gains without setting off the short term capital loss. 9. The order of the Commissioner of Income Tax (Appeals) is therefore set aside and the order of the Assessing Officer is restored. The Assessing Officer may pass consequential orders and follow up the action as required under law. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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