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2019 (2) TMI 653 - HC - Income TaxLoss occurred on the purchase and sale of the units - Applicability of Section 94(4) - Avoidance of tax by certain transactions in securities - Held that:- No such deeming fiction applied on the interest income obtained by the assessee by reason only of which the interest receivable by him is exempted from taxation. The fact that Section 10(15) exempts such interest income is not relevant, insofar as sub-section (4) speaking only of the interest received by an assessee being deemed to be not his income by reason of the provisions under sub-section (1). In such circumstances, we answer the first question of law framed in favour of the assessee and against the Revenue. We notice that the Tribunal has also considered the second issue of the assessee's purchase of securities being capital investment made, with which we do not think we have to deal with as we have found on the other issue that the assessee cannot be mulcted with the liability by adding back the loss claimed. There is also an ancillary ground raised on the application of sub-section (7) of Section 94, which is held in favour of the assessee and against the Revenue holding it to be prospective in application from 01.04.2002. The Hon'ble Supreme Court in CIT v. Walfort Share and Stock Brokers Private Limited [2010 (7) TMI 15 - SUPREME COURT] has upheld the judgment relied on by the Tribunal. The loss claimed by the assessee on the sale of securities shall be allowed without any dis-allowance made under sub-section (4) of Section 94.
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