Dividend Income and Capital Loss Exemption Upheld: Transparent Investment Strategy Validates Tax Claim Under Section 10(35)

ITAT upheld the assessee's claim for dividend income exemption under Section 10(35) and short-term capital loss set-off. The tribunal found no evidence of manipulative transactions with J.M. Financial Asset Management Ltd. Absent specific SEBI enquiry or proof of tax benefit manipulation, the investment was deemed genuine. The fund's market performance and transparent investment process supported the assessee's position. Section 94(7) was not applicable, and the capital loss was allowable under the Income Tax Act. CIT(A)'s order deleting the disallowance was confirmed, and the revenue's appeal was dismissed. .....

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