COMMISSIONER OF INCOME TAX Vs. KAILASH CHANDRA DHANUKA

JUDGEMENT

(1.) This appeal under section 260-A of the Income Tax Act, 1961 has been filed by the department against the order dt. 15-5-2009 passed by the ITAT in ITA No. 323/Ind/2007 for the assessment year 2004-05. In brief, the assessee is engaged in the business of trading in shares and securities, mutual fund units and derivative trading. In addition to this the respondent assessee has salary income as also house property income. The assessee had claimed before the assessing officer that for certain transactions done by the assessee, as reproduced in paragraph 5 of the order of the ITAT, the provisions of section 94(7) of the Income Tax Act (for short 'the Act') can not be attracted since the conditions contained in clauses (a), (b) & (c) of section 94(7) of the Act are not cumulatively satisfied. The assessing officer rejected the said contention of the assessee by observing that in respect of the given securities of Sundaram Mutual Fund, Sundaram Mutual Fund (Midcap), Tata Mutual Fund, Birla Midcap Fund-A and ILFS-Index-Nifty, the provisions of section 94(7) of the Act are attracted. In appeal, Commissioner (Appeals) took the view that in respect of the said units, section 94(7) of the Act is not attracted since the conditions of the said section are not cumulatively satisfied. The said view of the Commissioner (Appeals) has been affirmed by the ITAT.

(2.) Learned counsel appearing for the appellant submitted that the Commissioner (Appeals) as well as ITAT have committed an error in taking the view that the three conditions of section 94 (7) of the Act are to be cumulatively satisfied, whereas the said section is attracted even if one of the conditions mentioned therein is satisfied.

(3.) We have heard the learned counsel for the appellant at length.