JUDGMENT : K.S. Jhaveri, J. 1. This Tax Appeal u/s. 260A of the Income-tax Act, 1961 is filed against the order dated 07.07.2008 passed by the Income Tax Appellate Tribunal, Ahmedabad in ITA No. 3796/Ahd/2004 raising the following substantial question of law for our determination: "Whether the Income Tax Appellate Tribunal was justified in holding that the claim of capital loss of Rs. 61,45,052/- could not have been disallowed ?" 2. The assessee Company is engaged in the business of trading-in shares and securities. filed his return of income for the A.Y. 2001-02 on 12.10.2001 declaring total income of Rs. 3,92,910/-, which included long term capital gain of Rs. 2,20,954/-. The same was processed u/s. 143(1) of the Act. Subsequently, the case was selected for limited scrutiny and thereafter, assessment order was passed on 25.11.2002 determining the total income at Rs. 4,28,610/-. However, the case was re-opened by issuing Notice u/s. 148 of the Act and ultimately, order was passed on 24.11.2003 declaring total income at Rs. 65,73,662/-. 3. Against the said order, the assessee filed appeal before the CIT(A). The learned CIT(A) partly allowed the appeal, vide order dated 25.10.2004. Being aggrieved by the said order, the Revenue filed appeal before the Tribunal. However, the Tribunal dismissed the appeal of Revenue, vide order dated 07.07.2008. Hence, this Tax Appeal. 4. At the outset, Mr. Tushar Hemani, learned counsel for the assessee, submitted that the issue raised in this appeal is already settled by the judgment of Apex Court in the case of CIT v. Walfort Shares and Stock Brokers Pvt. Ltd., (2010) 326 ITR 01 (SC). He submitted that the aforesaid decision of the Apex Court has been relied upon by a Division Bench of this Court while deciding Tax Appeal Nos. 897/2007 & 898/2007 vide judgment and order dated 17.12.2014. For ready reference, the judgment dated 17.12.2014 is reproduced hereunder; "1. Since, the issue involved in both the appeals is common, they are heard together and disposed of by this common judgment. 2. These are the appeals by the appellant-Revenue, seeking to assail the order of the learned ITAT, Ahmedabad Bench (for short, the Tribunal), Dated : 08.09.2006, rendered in ITA Nos. 1566 & 1568/Ahd/2006 for A.Y. 2002-03, whereby, the Tribunal dismissed the said appeals filed by the Revenue. 3. 2. These are the appeals by the appellant-Revenue, seeking to assail the order of the learned ITAT, Ahmedabad Bench (for short, the Tribunal), Dated : 08.09.2006, rendered in ITA Nos. 1566 & 1568/Ahd/2006 for A.Y. 2002-03, whereby, the Tribunal dismissed the said appeals filed by the Revenue. 3. The brief facts of the case, as emerging from the Assessment Order, are that the respondent-assessee in respective appeal filed his/her return of income for the year under consideration, claiming short-term loss from A.Y. 2001-02. The cases of the assessees were taken-up for scrutiny by the concerned A.O. and he made certain additions/disallowances to the income of the respective assessee. The assessees, therefore, approached the learned CIT(A) by filing separate appeals, which came to be allowed in part. It appears that, then, the assessees as well as the Revenue carried the matter before the Tribunal, wherein, the Tribunal passed the impugned order. Hence, the present appeals. 4. At the time of admitting the present appeal, this Court framed the following question of law; Whether on the facts and circumstances of the case, the Appellate Tribunal was right in allowing the short term capital loss on sale of mutual funds within one day after earning tax free dividend income thereon? 5. At the very outset, Mr. Hemani, learned Advocate for the assessees in respective appeal, submitted that the question framed by this Court is no more res integra and that the same has already been answered by this Court in favour of the assessee vide its judgment, Dated : 23.06.2011, rendered in Tax Appeal No. 896 of 2007 in the case of one of the assessees, herein. While disposing of Tax Appeal No. 896 of 2007, this Court took into consideration a decision of the Apex Court in CIT v. WALFORT SHARES AND STOCK BROKERS P. LTD., (2010) 326 ITR 1 [SC], wherein, the Apex Court, under the similar circumstances, answered the issue in favour of the assessee, observing and holding as under; The real objection of the Department appears to be that the assessee is getting tax-free dividend; that at the same time it is claiming loss on the sale of the units; that the assessee had purposely and in a planned manner entered in to a pre-meditated transaction of buying and selling units yielding exempted dividends with full knowledge about the fall in the NAV after the record date and the payment of tax-free dividend and, therefore, loss on sale was not genuine. We find no merit in the above argument of the Department. At the outset, we may state that we have two sets of cases before us. The lead matter covers assessment years before insertion of Section 94(7) vide Finance Act, 2001 w.e.f. 1.4.2002. With regard to such cases we may state that on facts it is established that there was a "sale". The sale-price was received by the assessee. That, the assessee did receive dividend. The fact that the dividend received was tax-free is the position recognized under Section 10(33) of the Act. The assessee had made use of the said provision of the Act. That such use cannot be called "abuse of law". Even assuming that the transaction was pre-planned there is nothing to impeach the genuineness of the transaction. With regard to the ruling in McDowell & Co. Ltd. Commercial Tax Officer [1985] [154 ITR 148(SC)], it may be stated that in the later decision of this Court in Union of India v. Azadi Bachao Andolan [2003] [263 ITR 706 (SC)] it has been held that a citizen is free to carry on its business within the four corners of the law. That, mere tax planning, without any motive to evade taxes through colourable devices is not frowned upon even by the judgment of this Court in McDowell & Co. Ltd.'s case (supra). Hence, in the cases arising before 1.4.2002, losses pertaining to exempted income cannot be disallowed. 6. Mr. Bhatt, learned Sr. That, mere tax planning, without any motive to evade taxes through colourable devices is not frowned upon even by the judgment of this Court in McDowell & Co. Ltd.'s case (supra). Hence, in the cases arising before 1.4.2002, losses pertaining to exempted income cannot be disallowed. 6. Mr. Bhatt, learned Sr. Advocate, does not dispute the settled position of law, as above, and he is unable to point out any other judgment of the Apex Court taking a contrary view, then, the one taken by the Apex Court in the case of CIT v. WALFORT SHARES AND STOCK BROKERS P. LTD. (Supra). We hold that the Tribunal was right in allowing the short term capital loss on sale of mutual funds within one day after earning tax free dividend income thereon. 7. In view of the above discussion, both the appeals fail and are DISMISSED. The question framed in these appeals is answered in FAVOUR of the assessee and AGAINST the Revenue, accordingly. No order as to costs." 5. Learned Standing Counsel for the Revenue could not point out any distinguishing feature in the judgment, which may warrant a different view. 6. Considering the facts of this case and the principle rendered in the above decision, we are of the view that the issue raised in this appeal will be governed by the principle rendered in Tax Appeal Nos. 897/2007 & 898/2007 dated 17.12.2014, which has been passed on the basis of the judgment of Apex Court in Walfort Shares and Stock Brokers' case (supra). Consequently, we answer the question in favour of the assessee and against the Revenue. The appeal stands disposed of accordingly.