Section 94(7) of the Income Tax Act

Income-tax Act, 2025: s.175

Section 94(7) falls under section 94 of the Income-tax Act, 1961, which corresponds to section 175 (Avoidance of tax by certain transactions in securities) of the Income-tax Act, 2025.

Read section 175 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 94(7) is CIT v. Walfort Share & Stock Brokers (P.) Ltd. (326 ITR 1), cited in 543 of the 130 judgments on BharatTax that turn on this section.

Leading authorities on Section 94(7)

CIT v. Walfort Share & Stock Brokers (P.) Ltd.
326 ITR 1 · 2010 · Supreme Court
543
citing judgments

For attracting Section 14A disallowance, there must be a proximate cause relating the expenditure to actual tax-exempt income, and such disallowance is not automatic but requires positive material. Additionally, Section 94(7) on dividend stripping only ignores losses to the extent of dividend received for assessment years post-April 1, 2002, allowing the remaining loss.

Gramaphone Co. of India Ltd. v. Birendra Bahadur Pandey
132 Taxmann 373 · 2003 · Supreme Court
146
citing judgments
CIT v. Walfort Share & Stockbrokers (P) Ltd.
233 CTR 42 · 2010 · Supreme Court
19
citing judgments

Disallowance of expenditure under Section 14A requires a proximate cause establishing the relationship between the expenditure and the exempt income. The expenditure must have a real, dominant, and immediate relationship with income not forming part of the total income.

Calcutta in Eveready Industries India Ltd. v. CIT & Anr.
334 ITR 413 · 2011 · High Court
15
citing judgments

The court examines a transaction involving the purchase and sale of UTI units with a short holding period, highlighting the cum-dividend purchase in relation to a booking closing date.

Karan Maheshwari v. ACIT
176 Taxmann.com 700 · 2025 · Reported
8
citing judgments
McDowell & Co\nLtd v. CTO
47 CTR 126 · 1985 · Reported
8
citing judgments
Agencies Rajasthan (P) Ltd. v. ITO
109 Taxmann.com 139 · Reported
5
citing judgments
Income Tax Officer, Income Tax v. Sumitra Rajeshbhai Jain, Mumbai
2025 SCC OnLine ITAT 1859 · 2025 · Reported
3
citing judgments
434 ITR 1 (Bom.) (FB), Mohd. Farhan A. Shaikh v. DCIT
462 ITR 307 · High Court
3
citing judgments

Judgments on Section 94(7)

DCIT, Mumbai vs. Lalita Kothari, Mumbai

In the result, all appeals filed by the Revenue stands dismissed

ITA 2990/MUM/2025[2018]Status: DisposedITAT Mumbai22 Aug 2025

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 10(35)Section 133A

DCIT, Mumbai vs. Anita Kothari, Mumbai

In the result, all appeals filed by the Revenue stands dismissed

ITA 2988/MUM/2025[2019-20]Status: DisposedITAT Mumbai22 Aug 2025AY 2019-20

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 10(35)Section 133A

DCIT, Mumbai vs. 2015 Grover Family Trust, Mumbai

In the result, both the appeals of the Revenue are dismissed

ITA 5108/MUM/2024[2016-17]Status: DisposedITAT Mumbai12 Aug 2025AY 2016-17

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 133ASection 143(3)Section 147Section 94(7)(E)

DCIT, Mumbai vs. Cms Computers Limited, Mumbai

In the result, both the appeals of the Revenue are dismissed

ITA 5105/MUM/2024[2016-17]Status: DisposedITAT Mumbai12 Aug 2025AY 2016-17

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 133ASection 143(3)Section 147Section 94(7)(E)

ACIT Cental Circle 8(2) Mumbai, Mumbai vs. Subhkam Ventures (I) Private Limited, Mumbai

Appeals of the revenue are dismissed and the C

ITA 5657/MUM/2024[2015-16]Status: DisposedITAT Mumbai20 May 2025AY 2015-16

Bench: Shri Anikesh Banerjee, Jm & Ms Padmavathy S, Am

For Respondent: Shri Mahendra Bishnoi
Section 10(35)Section 132Section 250Section 94(7)

ACIT Central Circle 8(2) Mumbai, Mumbai vs. Subhkam Ventures (I) Private Limited, Mumbai

Appeals of the revenue are dismissed and the C

ITA 5622/MUM/2024[2018-19]Status: DisposedITAT Mumbai20 May 2025AY 2018-19

Bench: Shri Anikesh Banerjee, Jm & Ms Padmavathy S, Am

For Respondent: Shri Mahendra Bishnoi
Section 10(35)Section 132Section 250Section 94(7)

ACIT Central Circle 8(2) Mumbai, Mumbai vs. Subhkam Ventures (I) Private Limited, Mumbai

Appeals of the revenue are dismissed and the C

ITA 5620/MUM/2024[2016-17]Status: DisposedITAT Mumbai20 May 2025AY 2016-17

Bench: Shri Anikesh Banerjee, Jm & Ms Padmavathy S, Am

For Respondent: Shri Mahendra Bishnoi
Section 10(35)Section 132Section 250Section 94(7)

Deputy Commissioner of Income Tax, Central Circle-1(2), Income Tax Department vs. Rashesh Manhar Bhansali, Andheri East

In the result, appeal of the Revenue is dismissed

ITA 5107/MUM/2024[2016-17]Status: DisposedITAT Mumbai30 Apr 2025AY 2016-17

Bench: SHRI AMIT SHUKLA (Judicial Member), MS PADMAVATHY S (Accountant Member)

Section 10(35)Section 133ASection 143(3)Section 147Section 148

Indiabulls Commercial Credit Limited, New Delhi vs. PCIT (Central), Mumbai-3, Mumbai

In the result, the appeal is dismissed

ITA 2844/MUM/2024[2019-20]Status: DisposedITAT Mumbai24 Mar 2025AY 2019-20
For Appellant: Respondent byFor Respondent: Date of Hearing
Section 143(3)Section 263Section 94(7)

Income Tax Officer, Piramal Chambers vs. Dibya Trading Co LLP, Mumbai, Maharashtra

In the result, appeal of the revenue is dismissed and cross- objection of the assessee is also dismissed

ITA 4330/MUM/2024[2015-16]Status: DisposedITAT Mumbai02 Jan 2025AY 2015-16

Bench: Shri Amarjit Singh & Shri Sunil Kumar Singhassessment Year: 2015-16 Income Tax Officer Dibya Trading Co. Llp

For Appellant: Shri Madhur Agrawal & Shri Jay BhahsaliFor Respondent: Shri R.R. Makwana, Sr. DR
Section 10(35)Section 250

DCIT CC 1(1), Mumbai vs. Edel Finance Company Ltd., Mumbai

In the result, appeal of the revenue is partly allowed, and cross objection of the assessee is dismissed as withdrawn

ITA 3025/MUM/2024[2018-19]Status: DisposedITAT Mumbai10 Sept 2024AY 2018-19

Bench: Shri Anikesh Banerjee () & Shri Girish Agrawal ()

Section 10(34)Section 143(3)Section 144BSection 14ASection 250Section 94(7)

Goldiam International Limited, Mumbai vs. DCIT- CC 1(2), Mumbai

The appeals of the assessee are allowed partly

ITA 3218/MUM/2023[2016-17]Status: DisposedITAT Mumbai05 Apr 2024AY 2016-17

Bench: Shri Prashant Maharishi, Am & Shri Pavan Kumar Gadale, Jm Goldiam International Limited Plot No.16/17 Gems & Dcit, Central Circle 1(2) Vs. Jewelry Complex Seepz Sez Mumbai Andheri East, Mumbai-400 096 (Appellant) (Respondent) Pan No. Aaacg2271J

For Appellant: Shri Mani Jain, CAFor Respondent: Shri Mirza Azhar, DR
Section 10(35)Section 133ASection 143Section 147Section 148

Venerable Advertising Pvt. Ltd., Kolkata vs. PCIT, Kol-1, Kolkata

In the result, the appeal of the assessee stands allowed

ITA 459/KOL/2023[2018-19]Status: DisposedITAT Kolkata16 Jan 2024AY 2018-19

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. No.459/Kol/2023 Assessment Year: 2018-19 Venerable Advertising Pvt. Ltd....................…...……………....Appellant 6, Kali Krishna Tagore Street, Jorbagan, Kolkata- 700007. [Pan: Aaacv8673M] Vs. Pcit, Kolkata-1, Kolkata…..........................................…..…..... Respondent Appearances By: Shri Aayush Kedia, Ca, Appeared On Behalf Of The Appellant. Shri S. Datta, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : November 30, 2023 Date Of Pronouncing The Order : January 16, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Revision Order Dated 14.03.2023 Of The Principal Commissioner Of Income Tax, Kolkata [Hereinafter Referred To As ‘Pcit’] U/S 263 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). The Assessee In This Appeal Has Agitated Against The Action Of The Pr. Cit In Exercising His Revision Jurisdiction U/S 263 Of The Act & Thereby Directing The Assessing Officer To Frame The Assessment Afresh. 2. The Brief Facts Of The Case Are That The Assessee Vide Its Return Of Income For The Assessment Year Under Consideration I.E. A.Y 2018-19 Declared Total Income Of Rs.1,09,24,210/- Which Was Accepted By The Assessing Officer In The Assessment Carried Out U/S 143(3) Of The Act. However, Later On, The Ld. Pr. Cit In Exercising Of His Revision

Section 10(38)Section 143(3)Section 263Section 94(7)

Goldiam Jewellery Limited, Mumbai vs. DCIT-CC 1(2), Mumbai

The appeals of the assessee are allowed partly

ITA 3219/MUM/2023[2016-17]Status: DisposedITAT Mumbai03 Jan 2024AY 2016-17

Bench: Shri Prashant Maharishi, Am & Shri Pavan Kumar Gadale, Jm Goldiam International Limited Plot No.16/17 Gems & Dcit, Central Circle 1(2) Vs. Jewelry Complex Seepz Sez Mumbai Andheri East, Mumbai-400 096 (Appellant) (Respondent) Pan No. Aaacg2271J

For Appellant: Shri Mani Jain, CAFor Respondent: Shri Mirza Azhar, DR
Section 10(35)Section 133ASection 143Section 147Section 148

M/S. Zensar Technologies Ltd, Mumbai vs. The DCIT -2(3), Mumbai

In the result, ground No.5 and the additional ground of appeal are allowed

ITA 2907/MUM/2008[2002-2003]Status: DisposedITAT Mumbai28 Aug 2023AY 2002-2003

Bench: Shri Vikas Awasthy & Shrigagan Goyalआअसं.2907/मुं/2008 ("न.व.2002-03) Zensar Technologies Ltd. Magnet House, 2Nd Floor, Narottam Morarjee Marg, Ballard Estate, Mumbai 400 038. Pan: Aaacf-0742-K ...... अपीलाथ"/Appellant बनाम Vs. Dy. Commissioner Of Income Tax, Circle 2(31), Mumbai Mumbai. ..... ""तवाद"/Respondent अपीलाथ" "वारा/ Appellant By Shri Nitesh Joshi, Advocate : ""तवाद" "वारा/Respondent By : S/Shri Jasdeep Singh, Cit-Dr & Pratap Narayan Sharma, Sr. Ar सुनवाई क" "त"थ/ Date Of Hearing : 02/06/2023 घोषणा क" "त"थ/ Date Of Pronouncement : 28/08/2023 आदेश/Order

For Respondent: S/Shri Jasdeep Singh, CIT-DR &
Section 10ASection 115JSection 234DSection 80HSection 94(7)

Nadiminty Ganapathy Sastry, Hyderabad vs. DCIT, Circle-14(1), Hyderabad

In the result, appeal filed by the assessee is dismissed

ITA 303/HYD/2021[2013-14]Status: DisposedITAT Hyderabad11 Jul 2023AY 2013-14

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumarassessment Year: 2013-14 Shri Nadiminty Ganapathy Vs. Dy. C. I. T. Sastry, Circle 14(1) Hyderabad Hyderabad Pan:Aalpg5424F (Appellant) (Respondent) Assessee By: Shri K.A. Sai Prasad, Ca Revenue By: Smt.T.H. Vijayalakshmi,Dr Date Of Hearing: 05/07/2023 Date Of Pronouncement: 11/07/2023 Order Per R.K. Panda, Vice-This Appeal Filed By The Assessee Is Directed Against The Order Dated 31/03/2021 Passed U/S 263 Of The I.T. Act, 1961 By The Learned Pr.Cit-1, Hyderabad Relating To A.Y.2013-14. 2. There Is A Delay Of 50 Days In Filing Of This Appeal By The Assessee For Which The Assessee Has Filed A Condonation Application Explaining The Reasons For Delay Along With An Affidavit. After Considering The Contents Of The Condonation Petition Filed Along With The Affidavit & After Hearing The Learned Dr, The Delay In Filing Of This Appeal By The Assessee Is Condoned & The Appeal Is Admitted For Adjudication.

For Appellant: Shri K.A. Sai Prasad, CAFor Respondent: Smt.T.H. Vijayalakshmi,DR
Section 143(1)Section 143(2)Section 143(3)Section 147Section 148Section 263Section 94(7)

Shri. Bharat K Shah, Mumbai vs. ACIT-19(1), Mumbai

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 2379/MUM/2019[2009-10]Status: DisposedITAT Mumbai25 Jan 2023AY 2009-10

Bench: Shri Prashant Maharishi & Shir Pavan Kumar Gadaleshri Bharat K Shah Vs. Acit – 19(1) 1101-A, 11Th Floor, Matru Mandir, Tardeo Tirupati, Bhulabhai Mumbai – 400007. Desai Road, Mahalaxmi, Mumbai – 400 004. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aowps8142R Appellant .. Respondent Appellant By : Shri. Suchek Anchaliya.Ar Respondent By : Shri. Chetan M. Kacha.Dr Date Of Hearing 19.01.2023 Date Of Pronouncement 24.01.2023 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Order Of The Commissioner Of Income Tax (Appeals) – 30, Mumbai, Passed U/S 143(3) & 250 Of The Act. The Assessee Has Raised The Fallowing Grounds Of Appeal:

For Appellant: Shri. Suchek Anchaliya.ARFor Respondent: Shri. Chetan M. Kacha.DR
Section 143(1)Section 143(2)Section 143(3)Section 14ASection 57

M/S. Checons Limited, Kolkata vs. A.C.I.T., Circle-12(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 629/KOL/2022[2017-2018]Status: DisposedITAT Kolkata17 Jan 2023AY 2017-2018

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma]

Section 115JSection 14ASection 94(7)

Chowdry Associates, New Delhi vs. ACIT, Circle-6(1), New Delhi

In the result, appeal of the assessee is allowed

ITA 6333/DEL/2019[2011-12]Status: DisposedITAT Delhi26 Dec 2022AY 2011-12

Bench: Sh. Anil Chaturvedi & Sh. Chandra Mohan Gargchowdry Associates Vs. Acit 4Th Floor, Punjabi Bhawan, Circle – 6(1) 10, Rouse Avenue, New Delhi New Delhi-110 002

Section 143(3)Section 14ASection 250Section 271(1)(c)Section 94(7)

Crosslink Finlease Pvt. Ltd., New Delhi vs. ITO Ward - 6(4), New Delhi

In the result, the appeal is partly allowed for statistical

ITA 6267/DEL/2019[2009-10]Status: DisposedITAT Delhi27 Oct 2022AY 2009-10

Bench: Shri Saktijit Deyassessment Year: 2009-10 M/S. Cross Links Finlease Vs. Income Tax Officer, Pvt. Ltd. , Ward-6(4), B-1, Kalindi Colony, New Delhi New Delhi Pan :Aabcc3727A (Appellant) (Respondent)

Section 143(1)Section 147Section 14ASection 94(7)