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2018 (12) TMI 1330 - MADRAS HIGH COURTSection 94(8) as retrospective in operation or prospective - Dividend stripping in buying and selling of shares and units - Avoidance of tax by certain transactions in securities - whether bonus shares are distributed out of the benefit earned during the year and then, when there are no profits, bonus shares can be allotted out of accumulated results? - Held that:- Considering the general scope and purview of the Income Tax Act, the remedy sought to be applied and the former state of the law and what the legislature contemplated, we are of the clear view that sub-Section (8) of Section 94 was intended to be prospective. As pointed out by the Hon'ble Supreme Court of India in the case of Gold Coin Health Food (P) Ltd. [2008 (8) TMI 5 - SUPREME COURT]), that the law is well settled that the applicable provision would be the law as it existed on the date of filing of the return and when any loss is returned in any return, it need not necessarily be the loss, as the previous year is concerned. Therefore, the applicable law on the date of filing of the return cannot be confined only to the losses of the previous accounting years. We are of the clear view that the Tribunal committed error in reversing the order passed by the CIT(A)as sub-Section (8) of Section 94 is neither curative nor declaratory of the previous law, which has to be held to be prospective in operation. - Decided in favour of the assessee
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