Loss on dividend stripping transactions cannot be disallowed for years prior to introduction of specific anti-avoidance provisions

Citation : CIT Vs M/s. Walfort Share & Stock Brokers P. Ltd (Civil Appeal No. 4927 of 2010 arising out of S.L.P. (C) No. 19422 of 2009) Court: Supreme Court S. 94(7) was inserted prospectively w.e.f. 1.4.2002 to disallow dividend stripping losses. If the argument of the Revenue that even transactions prior to s. 94(7) can be disallowed is accepted, it will render s. 94(7) redundant and also lead to anomalous results. Backdrop Ø Finance Act, 2001 inserted sub-section (7) of section 94 in the Income-tax Act, 1961 (the ITA), with effect from Financial Year (F.Y.) 2001-02, to introduce anti-...