Hi,
The assessee had invested a significant amount in daily dividend reinvestment scheme during FY 2014-2015. These investments were made in tranches. He would also on a regular basis redeem certain units as and when required.
The principal amount and the dividends were invested and redeemed at the same rate; there was no income or loss during redemption. The total dividend earned has been shown as exempt income in his income tax return.
My queries are:
Are the above accountings and tax treatments correct? If no, what should be the correct tax and accounting treatments?
Can the AO taken any adverse view / contrary to the above? If yes, what?
What additional steps will the assessee need to take to further strengthen his case?
I would also appreciate if you can provide any case laws that favour the assesse.
Thank you all in advance,
CA Chandresh Sanat Jatania
CAclubindia
