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2016 (1) TMI 80 - AT - Income TaxDisallowance of set off of brought forward loss from transfer of short-term capital asset against gains arising from transfer of long-term capital asset - Held that:- As seen from the explanatory notes to Finance Act, 2002 , the loss arising from transfer of short-term capital asset can be set off against any capital gains, whether short-term capital gains or long-term capital gains . It further stipulated that the anomaly existing due to long-term capital gains being subject to lower rate of tax, are hence-forth allowed to be set off only against long-term capital gains. Hence, the contentions of Revenue in this respect as advanced in this appeal cannot be accepted. Similarly , the contention of the revenue that short-term capital loss cannot be set off against long-term capital gains due to difference in tax rate can also not be accepted because of the provisions of Section 74(1)(a) of the Act which clearly stipulates that carried forward losses arising from transfer of shortterm capital asset can be set off against income from capital gains assessable for the assessment year in respect of any other capital asset. Assessee company has rightly claimed the set off of brought forward loss arisen from the transfer of short-term capital asset incurred during the assessment year 2009-10 to be set off against the gains arising from transfer of long-term capital asset earned during the previous year relevant to the assessment year 2010-11 which has been wrongly denied by the A.O. and confirmed/sustained by the CIT(A). Hence, we set aside the orders of authorities below and direct for allowing the set off. - Decided in favour of assessee
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