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TMI Blog2004 (9) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued reiterating the contentions made before the Departmental authorities gaining the support of the citations that were mentioned in ground No. 1(b)(iv) as follows: (1) Kedarnath Jute Mfg. Co. Ltd. vs. CIT (1971) 82 ITR 363 (SC) (2) Sutlej Cotton Mills Ltd. vs. CIT 1978 CTR (SC) 155 : (1979) 116 ITR 1 (SC) (3) Juggilal Kamlapat vs. CIT (1969) 73 ITR 702 (SC) (4) Sumati Dayal vs. CIT (1995) 125 CTR (SC) 124 : (1995) 214 ITR 801 (SC) (5) CIT vs. Durga Prasad More 1973 CTR (SC) 500 : (1971) 82 ITR 540 (SC) (6) McDowell Co. Ltd. vs. CTO (1985) 47 CTR (SC) 126 : (1985) 154 ITR 148 (SC) (7) Workmen Associated Rubber Industry Ltd. vs. Associated Rubber Industry Ltd. (1985) 48 CTR (SC) 355 : (1986) 157 ITR 77 (SC) 5. Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but a short-term capital loss, which is not liable to be set off against the business loss/income. The AO has further observed that as per the nature of transactions, it is clear that it is only an investment with an intention to have dividend and not a regular business activity as is evidenced from the sale of the said units immediately after the next day of the receipt of the dividends. Thus, observing, the AO has worked out short-term capital loss of. Rs. 8,05,547 which could be set off against capital gains for the year or can be carried forward under s. 74 of the Act. On appeal by the assessee aggrieved by the said assessment order of the AO before the CIT(A), the assessee has reiterated its claim as was made before the AO, but, the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s brought the attention of the Tribunal to the Instruction dt. 23rd Feb., 2001, issued by the CBDT No. 178/32/2003/ITA-I, wherein it had been clarified that this kind of transaction cannot be treated as physical nullity. It was further stated that the AO should make disallowance after indepth investigation and proper recording and marshalling of all the relevant facts, so as to establish suo motu tax avoidance. On analysis of both the impugned orders of the Departmental authorities in the light of this circular/instructions issued by the CBDT, we find that there is no attempt admittedly made by the Departmental authorities in pursuance to the said instructions, thereby no doubt was expressed by the Department about the genuinity of the tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dabad 'C' Bench, has also considered similar such issue in the case of Dy. CIT vs. Cadila Laboratories Ltd. (2004) 83 TTJ (Ahd) 758 after threadbare examining the similar such issue, has held that loss on sale of units of UTI, sub-s. (7) to s. 94 has been brought on statute book w.e.f. 1st April, 2002, only and, therefore, short-term capital loss was rightly allowed by CIT(A) for the asst. yr. 1991-92 in question. Further, this Tribunal, Mumbai 'F' Bench, has passed order in the case of Asstt. CIT vs. Premier Consolidated Capital Trust (I) Ltd. (2004) 83 TTJ (Mumbai) 843, wherein it was held that loss on purchase and sale of tax-free bonds incurred by assessee-company carrying on business in investments and financial management activities, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in McDowell Co. Ltd. case is not applicable to the facts of the present case on hand. In the present case on hand also, the Department has sought for the support of the decision of the apex Court rendered in the case of McDowell Co. Ltd. Since this Tribunal has given its order after considering the apex Court judgment in McDowell Co. Ltd.'s case and having found no dissimilarity in the facts and circumstances of the case on hand as well as facts and circumstances in the said case dealt with by the Tribunal stated supra, we find that the issue is squarely covered by the above orders of the Tribunal and hence we are of the considered view that the claim of the assessee is to be upheld finding the view of the Department as unsustain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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