TMI Blog2008 (9) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation, of which it is a partner and has received income from the firms which was offered as its business income. He further noticed that apart from the above, the other source of income is capital gain on sale of shares. From the perusal of the computation of income, the Assessing Officer noticed that the assessee has calculated long-term capital gain from sale of shares without indexation which has been offered for taxation at the flat rate of 10 per cent as per proviso to section 112(1) of the Act against which the long-term capital loss on sale of units after indexation has been set off. He, therefore, asked the assessee to file its explanation for setting off long-term capital loss calculated with indexation from long-term capital gain calculated without indexation. The assessee vide letter dated 16-12-2002 submitted that as per the 2nd proviso to section 48 of the Act, the indexed cost of acquisition or the indexed cost of improvement, is the privilege allowed to the assessee insofar as the capital gain arising from the transfer of a long-term capital asset (being listed securities or units) is concerned. He submitted that the choice to avail of the benefit of indexati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions and submitted that the assessee had sold shares of Infosys Technologies Ltd. and also the units of Birla Income Plus during the relevant financial year. In respect of sale of shares of Infosys Technologies Ltd., the assessee had opted for not taking the benefit of indexation as per proviso to section 48 and to pay tax at the rate of 10 per cent as provided under section 112. While in respect of sale of units of Birla Income Plus, the assessee has opted for taking benefit of indexation as per proviso to section 48 of the Act. He submitted that sub-section (1) of section 112 begins with the sentence "where the total income of an assessee includes any income, arising from the transfer of a long-term capital asset...." and the expression capital asset has been used in singular which means that where several transactions have taken place by way of sale of shares, the assessee can avail the benefit of indexation in a few transactions and avail the 10 per cent tax rate in the remaining transactions. In support of this contention, he placed reliance upon the decision of the Delhi Bench of the Tribunal in the case of Devinder Prakash Kalra v. Asstt. CIT [2006] 151 Taxman 17 (M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Mumbai Tribunal in the case of Alcan Inc. v. Dy. Director of Income-tax (International Taxation) [2007] 16 SOT 8 (Mum.), in support of her submissions. She also made a reference to section 13(2) of General Clauses Act, 1897 which states that in all Central Acts and Regulations, unless there is anything repugnant in the subject or context, the words in the singular shall include the plural and vice versa. 6. Having heard both the parties and having considered their rival submissions, we find that the only dispute in this case is as to whether while computing the income under the head capital gains , income from certain sources can be computed taking the benefit of indexation and the income from certain other sources can be computed without indexation and can there be a set off of loss computed from a source with indexation from the gain from computed without indexation another source. Let us first examine the relevant legal provisions. The computation of income from capital gains is governed by section 48 of the Income-tax Act, which reads as follows- "Section 48. The income chargeable under the head "Capital gains" shall be computed, by deduction from the full va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x on long-term capital gain. For proper appreciation of the case, the relevant portion of section 112 is reproduced hereunder "Section 112(1) Where the total income of an assessee includes any income, arising from the transfer of a long-term capital asset, which is chargeable under the head "Capital gains", the tax payable by the assessee on the total income shall be the aggregate of, ( a )in the case of an individual or a Hindu undivided family, (being a resident) ( i )the amount of Income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been his total income, and ( ii )the amount of income-tax calculated on such long-term capital gains at the rate of twenty per cent : Provided that ( b )****** ( c )****** ( d )****** Provided that where the tax payable in respect of any income arising from the transfer of a long-term capital asset, being listed securities (or unit) or zero coupon bond) exceeds ten per cent of the amount of capital gains before giving effect to the provisions of the second proviso to section 148, then, such excess shall be ignored for the purpose of computing th ..... 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