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TMI Blog2019 (1) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... e issues in the later appeal is connected to one of the three issues arising in the former. We will hence take up the appeal for the year 2004-05 first. 2. The questions of law framed by the Revenue are re-framed by us as follows, the last arising in both the years and the others only in the year 2004-05: (i) Whether the Tribunal was right in holding that the loss arising out of sale of mutual fund units should be allowed as business loss, especially looking at the provision of Section 94(7)? (ii) Whether the Tribunal was right in having deleted the dis-allowance made under Section 14A of the Income-Tax Act and remanding the matter to the Assessing Officer for fresh consideration? (iii) Whether the Tribunal was correct in having fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfied insofar as bringing in the rigour of Section 94(7);(i) acquisition should be within three months from the record date, (ii) the sale should be within three months after such date and (iii) the dividend or income on such unit received or receivable by person is exempt. 5. There were six sets of units of purchase as is seen from the table, from the order of the Tribunal. Admittedly dividend was received on all these units though the purchase was made on the record date. The dividend was also exempt under the provisions of the Act as already found by us. Even a purchase made on the record date has to be construed as one purchased with the intention to receive dividend, which is exempt and hence satisfying the condition as per sub-claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.2003 was sold on 09.02.2004. The three month period expires on 7.2.2004, two days before the sale was effected. Hence in these three items the sale was made after the period provided under Section 94(7)(1)(b). 8. As to the other three purchases made of Sundaram Bond Half Yearly; it was on the record date 26.12.2003. Computing the three months period from 27.12.2013 it expires on 26.03.2004 when the sale was made. The said sale has to be found as having been made within the three months period. Hence with respect to the units purchased and sold of Sundaram Bond Half Yearly Section 94 squarely applies. We answer the question partly in favour of the revenue and partly in favour of the assessee. 9. On the issue of 14A deduction, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with interest that accrued from the date of such retention in the Staff Welfare Fund Account. 11. The Assessing Officer found that there is no separate credit made to the employee's account in the relevant fund or funds so as to enable deduction under Section 36(1)(va). The CIT Appeals found that the expenditure is allowable under Section 14A(9) which did not find favour with the Tribunal. The Tribunal all the same found that accounts will be in the nature of a Sundry Credit and the same could be so allowed as a deduction. We do not agree with the Tribunal on that count since the employer having shown the amount in the salary slip of the employee and retained the same with the employer; it becomes an income includable under Section 2( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt in the relevant fund; the principal and interest accrued, being eventually payable to the employee on his superannuation. We hence find that the deduction under Section 36(1)(va) is permissible. 14. We find that the assessee had claimed it as expenditure under Section 37 which however, is not permissible. The Tribunal's finding as to treating it as Sundry Credit also cannot be sustained, but we answer the question of law in favour of the assessee and against the revenue in so far as the deduction being permissible under Section 36(1)(va). We hence partly allow ITA No.231/2012. 15. As to ITA 66/2015 the question raised is again on the Staff Welfare Scheme. The First Appellate Authority and the Tribunal had allowed the same finding that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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