TMI Blog2009 (12) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (Appeals) is justified in confirming the order of the Assessing Officer in applying provisions of section 94(7) of the Income-tax Act when the assessee purchased the units of Birla Gilt Liquid Plan Dividend Payout only on the record date. Therefore, the disallowance could be made when the units are both prior to the record date. 3. Whether the Commissioner of Income-tax (Appeals) is justified in sustaining the order of the Assessing Officer holding that these units have been sold within three months from the record date. 3. Issue No. 1: We have heard the learned authorised representative as well the learned Departmental representative and duly considered the relevant records. From the assessment order, it is clear that the case w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the provisions of section 94(7), the loss arising on such purchase and sale of units shall be ignored for the purpose of computing the income. On appeal, the Commissioner of Income-tax (Appeals) confirmed the order of the Assessing Officer to the extent of applicability of the provisions of section 94(7) but directed the Assessing Officer to verify and grant appropriate relief as per law on the alternative claim of the assessee that the disallowance under section 94(7) should be restricted only to the amount of dividend received. Before us, the learned authorised representative for the assessee has submitted that the assessee purchased the units on the record date which is not covered under section 94(7). The provisions of section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). Federation of Andhra Pradesh Chambers of Commerce and Industry v. State of Andhra Pradesh [2001] 247 ITR 36 (SC). Keshavji Ravji and Co. v. CIT [1990] 183 ITR 1 (SC). T. Ashok Pai v. CIT [2007] 292 ITR 11 (SC). Wallfort Shares and Stock Brokers Ltd. v. ITO [2005] 96 ITD 1 (Mum) [SB]. On the other hand, the learned Departmental representative has submitted that an interpretation of a provision should not lead to absurdity of the provision. The purpose for interpretation is to make the provision workable. He has countered the contention of the learned authorised representative and submitted that it would lead to absurdity if the provision would apply to a person purchasing the units prior to the record date but not when he purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Income-tax (Appeals) on August 8, 2003, then the limitation for filing the appeal would reckon from August 9, 2003 and would expire on the expiry of 60th day. If the assessee prefers to file an appeal before this Tribunal on August 8, 2003 itself, then it cannot be said that the appeal of the assessee is not within the period of limitation because the limitation started only on August 9, 2003. The object and purpose of excluding the day on which the cause of action arises is to make available clear days of limitation prescribed under the statute and, therefore, the said day is excluded for the purpose of counting the latest or the outer limit of period of limitation and not for the earliest or nearest point of time to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction, permissible in the context, should not be adopted. In this respect, taxing statutes are not different from other statutes. From the above decisions relied upon by learned counsel for the assessee, it is clear that in normal course, when there is no ambiguity in the statutory language, the courts are not supposed to give an interpretation or construction which is not the intent of the Legislature. But when the strict literal construction leads to an absurdity not intended by the Legislature, then, a construction may be permissible in the context to subserve the object of legislation. In the case of T. Ashok Pai v. CIT [2007] 292 ITR 11 the hon ble apex court has observed that the more stringent the law, the more strict a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative that the units are not transferable and therefore the provisions of section 94(7) are not applicable is concerned, we do not find any substance in the same because the redemption is also a transfer though transferability is limited. Therefore, it cannot be said that the units are not at all transferable and if that is so, then there would be no loss as claimed by the assessee. This issue is decided against the assessee and in favour of the Revenue. 18. Issue No. 3 : The main contention of the learned authorised representative regarding this is that the assessee has sold the units on November 7, 2003 and, therefore, the same is only on the expiry of three months from the record date. He has referred to section 3(5) of the G ..... X X X X Extracts X X X X X X X X Extracts X X X X
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