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TMI Blog2016 (1) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... red to the extent of the amount of dividend or income received or receivable which is exempt as per the provisions of the Act. The transaction in question was completed prior to the bill proposing the amendment to be introduced then it is not disputed that the assessee could not visualize the subsequent amendment in the provisions of sec.94(7) and enhancement of tax liability as per the subsequent amendment. When the incident of tax being sale of units occurred prior to the introduction of the bill proposing the amendment in section 94(7) then the additional tax liability cannot be fastened on the transactions of and sale of securities/units by virtue of subsequent amendment. Accordingly, in view of the above discussion and in the facts and circumstances of the case, we hold that by virtue of the amendment vide Finance Act 2004 in section 94(7) no additional tax liability can be imputed on the transaction of sale of M.F.units completed prior to the introduction of bil proposing the amendment. Hence, the addition made by AO by invoking the provision of section 94(7) is deleted. - Decided in favour of assessee - ITA No.1287/Bang/2014 - - - Dated:- 13-11-2015 - SHRI ABRAHAM P GE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,124/-. The details of transaction of purchase and sale of mutual funds and the loss incurred by the assessee are given in para.3 of the assessment order as under: 4. The Assessing Officer(AO) examined the above details in light of the provisions of sec.94(7) of the Income-tax Act,1961 [the Act for short]. The AO found that out of the above investments in mutual funds, investment in HSBC and Templeton Growth Fund is not covered under the provisions of 94(7)of the Act as no dividend was declared. Therefore, the AO excluded these two transactions from the purview of sec.94(7) and proceeded for dividend scripting in respect of three remaining transactions viz., Birla Yield Plus, Chola triple ace and Templeton India Growth. The AO held that as per sec.94(7) when the units were sold within 9 months of the record date and the assessee received dividend then to the extent of dividend so received short-term capital loss on these transactions is to be disallowed. The AO has given details of the dividend received by the assessee at page 3 as under: Sl.No. Name of the fund Value of dividend received 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Hon ble Gujarat High Court in the case of Nirmal Textiles Ltd. (224 ITR 378) and submitted that the Hon ble High Court has held that capital gains is not income which accrues from day to-day during the previous year but arises at the fixed point of time i.e. on the date of transfer. Therefore, for tax on capital gains, law to be applied is the law on the date of transfer. He further submitted that harmonious construction of the provisions is required to be considered for the purpose of determining the tax liability of the assessee on the basis of subsequent amendment in the provisions of the Act. On the other hand, learned departmental representative has submitted that there is no dispute that the substituted sec.94(7)(b)(ii) of the Act is applicable w.e.f. 1/4/2005 and therefore, in view of the judgment of the Hon ble Supreme Court in the case of Karimthanavi Tea Estates Ltd (supra) the amended provision was to be applied to the assessment year 2005-06. He has relied upon the orders of the authorities below and submitted that when the provision is applicable w.e.f. 1/4/2005 then the provisions which existed on the beginning of the assessment year under consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er unlike the profits and gains of business which accrued at the end of the previous year in paras.11 to 14 as under: 11. We may refer to well established canons of interpreting the taxation statute. There are three stages in imposition of a tax. There is the declaration of liability,that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment, that ex hypothesi has already been fixed. But the assessment particularizes the exact sum which a person liable has to pay. Lastly, come the methods of recovery if the person taxed does not voluntarily pay. The dictum of Lord Dunedin in Whitney vs. IRC (1926) Appeal Cases 37 has been quoted time and again by the Federal Court and the Supreme Court of India in various decisions and does not need elaboration. The other principle in the present context is, that the taxable event is that which on its occurrence creates or attracts the liability to tax. Such liability does not exist or accrue at any earlier or later point of time. This is what the apex Court stated in Goodyear India Ltd. vs. State of Haryana (1990) 76 STC 71 (SC). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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