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2019 (9) TMI 366 - AT - Income TaxTDS u/s 194C - Addition u/s 40(a)(ia) - assessee company had incurred ‘horse expenses’ - HELD THAT:- Primary argument of the Ld AR is that the payee i.e. M/s Royal Calcutta Turf Club has duly included the subject mentioned receipts in their return of income and had paid taxes thereon which may be verified by the AO. DR also fairly agreed for the same. In view of the amendment to second proviso to section 40(a)(ia) read with section 201(1) if the payees have included the subject mentioned receipts in their returns and paid taxes thereon, if any, then the disallowance u/s 40(a)(ia) would not operate in the hands of the payer. Hence in the interest of justice and fairplay, we deem it fit and appropriate, to remand this issue to the file of the AO for denovo adjudication of the issue in the light of second proviso to section 40(a)(ia). The assessee is also given liberty to adduce fresh evidences in support of its claim before the AO. Accordingly, Ground No.1 raised by the assessee is allowed for statistical purposes. Carry forward of long term capital loss incurred on sale of listed securities - HELD THAT:- As decided in case of Raptakos Brett & Co. Ltd 2015 (6) TMI 529 - ITAT MUMBAI assessee had incurred loss on sale of shares after paying STT & these shares were held on investment a/c for period more than 12 months. The assessee claimed that the loss incurred was to be assessed under the head ‘capital gains’ and its set off was permissible against capital gain earned on transfer of other capital assets. The AO however disallowed the assessee’s claim for assessment of long term capital loss on the ground that “income” earned in similar transactions was not chargeable to tax in view of exemption granted by S. 10(38) of the I.T. Act. In the AO’s opinion Sec. 10(38) was applicable equally to all transactions of sale of investment shares involving STT payment & irrespective whether the resultant effect was profit/income or loss. On further appeal this Tribunal relying on the judgment of the Hon’ble Calcutta High Court (supra) held that same considerations did not apply to the income exempt u/s 10 and the loss incurred in similar transactions. The ITAT therefore held that assessee was entitled to get its loss assessed & was also entitled to get such loss set off. We direct the AO to assess the long term capital loss incurred by the appellant on sale of listed shares and allow its carry forward in accordance with law. Ground No. 2 is therefore allowed.
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