TMI Blog2016 (1) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... spect 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 - I.T.A. No. 307/Mum/2014 - - - Dated:- 16-12-2015 - Shri Amit Shukla, Judicial Member And Shri Ramit Kochar, Accountant Member For the Petitioner : Shri Ajay R. Singh For the Respondent : Shri Rajesh Ojha ORDER Per Ramit Kochar, Accountant Member This appeal, filed by the assessee company, being ITA No. 307/Mum/2014, is directed against the orders dated 22-10-2013 passed by the learned Commissioner of Income Tax(Appeals)- 8, Mumbai (Hereinafter called the CIT(A) ), for the assessment year 2010-11. 2. Although the assessee company has raised five grounds of appeal in this appeal filed with the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be entitled to have the amount of such loss set off against his income from any other source under the same head. (2) Where the result of the computation made for any assessment year under section 48 to in respect of any short-term capital asset is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset. (3) where the result of the computation made for any assessment year under section 48 to 55 in respect of any capital asset (other than a short term capital asset) is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset not being a short term capital asset. In the opinion of A.O., loss arising from transfer of short-term capital assets (on which STT is paid) is assessed at 15% tax rate while the gain arising from transfer of long-term capital assets (on which STT is not paid) is assessed at 20% tax rate and hence the AO held that it cannot be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no. 28 of the Finance Bill of 2002 in respect of Amendment proposed and carried out in Sec. 74 is enclosed herewith. The assessee company also submitted that Section 70 of the Act is not applicable because it deals with intra-head set off of capital losses incurred during the same year against gains of the same year and does not deal with the set off of brought forward capital losses. The CIT(A) rejected the contentions of the assessee company and held that loss arising from the transfer of short-term capital asset (on which STT is paid) of ₹ 19,21,095/- and gains arising from transfer of long-term capital assets (on which STT is not paid) of ₹ 26,46,573/- are different heads and do not come under similar computation as gain arising from transfer of short-term capital asset in the present case is assessed @ 15% tax rate and gain arising from transfer of long-term capital asset is assessed at 20% tax rate and hence appeal of the assessee company was rejected and the assessment order of the A.O. was upheld whereby the CIT(A) held that brought forward loss incurred on transfer of short-term capital asset(on which STT was paid ) of ₹ 19,21,095/- is not allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessee, the whole loss shall subject to the other provisions of this chapter, be carried forward to the following assessment year, and - (a) insofar as such loss relates to a short term 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 assets. While the A.O. disallowed the loss by referring to section 70(3) of the Act which reads as under:- Set off of loss from one source against income from another source under the same head of income Section 70(3) 70(3) where the result of the computation made for any assessment year under section 48 to 55 in respect of any capital asset (other than a short term capital asset) is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset not being a short term capital asset. It could be seen that section 70 of the Act deals with the set off losses from one source against the income from another source under the same head of income and deals wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital 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 and the decision of the Tribunal in the case of Capital International Emerging Markets Fund v. DDIT (2013) 145 ITD 491(Mum.-Trib.) supports the contention of the assessee company , whereby the Tribunal held as under: 3.2. We have heard the rival submissions and perused the material. We find that identical issue was decided in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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