1. As per sec 47(xix) when any capital asset in the nature of units of MF, allotment is made as a result of any consolidation plan of mutual fund scheme, the same is not considered as a transfer for the purpose of determining capital gain.
2. If you are running a business of buying and selling mutual funds on which the gain will be charged to tax under the head PGBP. The same benefit will not be available.
3. Moreover, as explained by the expert above it is only at the time of redemption, the gain arising on MF will be taxable. Otherwise, its an unrealized gain and only book entries will be passed.
Please correct me if the above solution has an alternative view.