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2015 (1) TMI 567 - HC - Income TaxSpeculative transaction - transactions entered into by the appellant in respect of ACC shares and the loss of ₹ 14.82 lacs incurred - adverse price fluctuation - Scope of section 43(5) - Held that:- The undisputed facts in this case, contain ingredients of hedging. The result of those transactions, however, was gain in the holding of shares by the assessee by incurring loss of the said sum of ₹ 14.82 lacs, the value of increase in the holding of the appellant in the shares in that period. Therefore, when ultimately the appellant sold those shares at an even greater value, it was denied the windfall profit it would have made if it had not hedged at all. For the reasons aforesaid we answer the questions in the negative. - Decided in favour of assessee. Treatment of dividend stripping transactions as sham or bogus - Share transaction of the assessee in respect of UTI Master Share Units - Held that:- the appellant incurred a loss of ₹ 68,900/- and was in receipt of dividend income of ₹ 1,26,000/- as claimed by it or as held by the Tribunal, it made a profit of ₹ 56,000/- and the dividend amount and consequently deduction under Section 80M and credit for tax deducted at source has to be excluded from the appellant's assessment - Held that:- Though the contract was entered into, it was not specifically performed. There was an alteration made thereto in as much as the assessee obtained the dividends and then sold the shares at the reduced price to its buyer. Alteration of contract is permissible in law. The Hon'ble Supreme Court in Walfort Share and Stock Brokers's case [2010 (7) TMI 15 - SUPREME COURT] had made the position clear regarding dividend stripping by owners of shares in the period prior to 1st April, 2002, while this court had clearly held until change by registration is effected in the books of the company, the transferor continues to be the holder of the shares. - Decided in favour of assessee.
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