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2015 (9) TMI 1300 - AT - Income TaxLong term capital loss - investment in shares - exemption u/s 10(38) - CIT(A) allowed the carry forward of loss to the appellant instead of setting it off against the exempt income u/s.10(38) - Held that:- Clause (b) of sub section (1) of section 74 provide that in so far as capital loss relate to capital asset, it shall be set off against income, if any, under the head “Capital gains” assessable for that assessment year in respect of any other capital asset not being a short term capital asset and arising in the following assessment year. Law makes it amply clear that long term capital loss can be set off only against assessable capital gains and not otherwise. However, while giving effect to the order of the ld. CIT(A) on 21st March, 2011. ld. AO set off the loss from the long term capital gain, not assessable to tax during the year under consideration. In view of specific provisions of section 74 as noted hereinabove ld.A.O was not entitled to reduce the loss, from the income exempt u/s 10(38) of the Income Tax Act, 1961. We do not find any infirmity in the order passed by the Ld. CIT(A) in allowing the carry forward of loss in view of the discussion above. - Decided against revenue.
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