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2018 (1) TMI 395 - AT - Income TaxTreating the loss from the transactions in mutual funds - busniss or capital loss - Held that:- After having recorded these findings on the basis of submissions made by the assessee, the Ld. CIT(A) held that the transactions in shares and mutual funds could not be split up to give different treatment for the purpose of computing the income of the assessee since both the activities were one and the same and were carried on in an organized manner to earn profit. He accordingly directed the A.O. to treat the loss incurred by the assessee in the transactions of mutual funds as business loss and set off the same against the profits of the assessese from share trading. At the time of hearing before the Tribunal, DR has not been able to raise any material contention or bring any relevant material to rebut or controvert the findings recorded by the Ld. CIT(A) while giving relief to the assessee on this issue. Therefore, find no justifiable reason to interfere with the impugned order of the Ld. CIT(A) giving relief to the assessee on this issue. As regards the application of provisions of section 94(7), the Ld. CIT(A) has held that the said provisions are not applicable in the case of the assessee as it involved investment in dividend reinvestment plan. Moreover, as submitted by the learned counsel for the assessee at the time of hearing, the assessee had not received any dividend from the relevant mutual funds. Thus as in agreement with the Ld. CIT(A) that provisions of 94(7) are not applicable in the case of the assessee. As held by the Ld. CIT(A), the provisions of section 94(8) were relevant and since the assessee had not continued to hold all or any of the additional unit allotted on the reinvestment of the dividend, the same was also not applicable. Therefore, uphold the impugned order of the Ld. CIT(A) giving relief to the assessee on this issue and dismiss ground no 1 and 2 of the revenue’s appeal. Addition u/s 14A - Held that:- It is observed that this issue is squarely covered in favour of the assessee by the decision of the Hon’ble Kolkata High Court in the case of CIT vs G.K.K. Capital Markets (P) Ltd. (2017 (2) TMI 628 - CALCUTTA HIGH COURT) wherein it was held that no disallowance under section 14A can be made on account of expenditure incurred in relation to the investment made by the assessee in shares held as stock in trade. - Decided against revenue
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