TMI Blog2022 (2) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... e has not provided break up of dividend is erroneous. Therefore, same cannot be sustained - we hereby direct the Assessing officer to delete the addition. - Decided in favour of assessee. - ITA No. 7015/DEL/2019 - - - Dated:- 11-2-2022 - SHRI KUL BHARAT , JUDICIAL MEMBER For the Appellant : Tejinder Singh Saini , CA For the Respondents : Sanjiv Mahajan , Sr. DR ORDER Per Kul Bharat , JM This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-11, New Delhi, dated 25.06.2019, pertaining to the assessment year 2016-17. The assessee has raised following grounds of appeal: The Ld. CIT(A) has erred on facts and in law in partially upholding the order of the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds of ₹ 5,55,414/- during the year under consideration. However, inadvertently in the income-tax return the amount shown/claimed as exempt was ₹ 5,27,900/-. Out of this amount of ₹ 4,09,867/- was reduced from the loss incurred by way of credit to the profit and loss account. This was around 74% of the total dividend earned. There was no motive or intent to avoid the tax. Nearly 3/4th of the dividend was offered for taxation. Therefore, the business loss incurred may not be covered u/s. 94(7) of the Act. However, the reply of the assessee was not found acceptable by the Assessing Officer and proceeded to make addition of ₹ 1,45,547/-. 3. Aggrieved against this the assessee preferred appeal before the learned CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was not covered under the provisions of Section 94(7) of the Act. However, the learned CIT(Appeals) sustained the addition by observing as under: 5.4.1 I have carefully considered the observations of AO and submissions of appellant. During the course of appellate proceedings, appellant has submitted that amount of ₹ 178404.33 is out of the scope of section 94(7) of the I.T. Act, 1961. On perusal of the facts of the case it is seen that appellant has not given the entire break-up of dividend to the extent of ₹ 5,55,414/- neither he has explained how the provisions of section 94(7) are not attracted in his case. Therefore, there is no basis in the claim of appellant. Accordingly, I find no reason to interfere in the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to AY 2016-17) and claimed exempt were purchased way back in the year 2006, 2007, 2010, 2011 and 2013. This goes to prove beyond doubt that the appellant's dividend income is not hit by provisions of section 94(7) to cover it as taxable under Dividends Stripping. Section 94(7) has been reproduced below:-As per sec. 94(7), Where-- (a) any person buys or acquires any securities or unit within a period of three months prior to the record date; (b) such person sells or transfers-- (I) such securities within a period of three months after such date; or (II) such unit within a period of nine months after such date; (c) the dividend or income on such securities or unit received or receivable by such person is exe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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