• Treatment of Loss on Sale of Mutual Funds in MAT

The Company has been paying Tax as per MAT u/s 115JB. It purchased Mutual Funds, 4 months before the Dividend record date whose NAV @ 10 each. Dividend of Rs. 3 was paid on each unit. The company sold the Units @ Rs. 7, 15 months after it had purchased them. 

This case doesn't fulfill the condition specified in Sec 94(7) relating to Dividend Stripping. Under MAT provisions, does the AO have the authority to add back Loss of Sale of Investments (Rs. 3) on the grounds that this losses are expenses incurred to earn such dividends ?