During year, assessee claimed exempt income on dividend, earned on units of mutual fund and further claimed short-term capital loss (STCL) on sale of same. Assessing Officer disallowed said STCL under section 94(7).Since  units of mutual funds were purchased much before 3 months period prior to record date, condition prescribed in clause a of section 94(7) was not satisfied and consequently provision of section 94 was not applicable on assessee, thus, Commissioner (Appeals) was justified in giving relief of disallowance of STCL under section 94(7). Since transactions entered by assessee were with SEBI regulated mutual fund scheme of a very big and reputed asset management company and Assessing Officer had failed to bring any evidence on record about motive of assessee in indulging transaction to earn loss, intention of assessee could not be assumed to be earning loss with gloves in hand with a reputed AMC.  (AY.2016-17)