Dividend Stripping Disallowance Upheld as Section 94(7) Applies to Entire Dividend

Punita Kalpesh Patel Vs ACIT (ITAT Ahmedabad) The appeal arises from an order confirming disallowance of ₹5,31,37,390 under section 94(7) of the Income Tax Act, 1961 for the Assessment Year 2018–19. The assessee had declared substantial long-term capital gains from sale of unlisted shares, which were set off against short-term capital losses arising from sale of listed shares and mutual fund units. The assessee also received dividend income from both shares and mutual funds, part of which was claimed exempt and part taxed at a concessional rate. During assessment, the Assessing Officer exa...