TMI Blog2017 (11) TMI 1940X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of the learned counsel for the assessee that for the purpose of section 10(38) of the Act term income would not include loss cannot be accepted and rightly rejected by the Tribunal. If this is available for set off the Tribunal rightly relied on the decision in the case of Harprashad Co. (P.) Ltd. [ 1975 (2) TMI 2 - SUPREME COURT ] to come to a conclusion that the term income under section 10(38) of the Act would also include the loss. In the said decision, the apex court observed that the concept of carry forward of loss does not stand in vacuo. It involves the notion of set off it postulates permissibility and possibility of the carried forward loss being absorbed or set off against the profits and gains profit to reduce th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 38,29,29,330/-. Later on, vide rectification order passed u/s 154 the Act, AO computed the total income of the assessee at ₹ 14,64,61,665/-. 3. During the financial year 2004-05, the appellant sold a portion of the investment in BDH Industries Ltd. for a total consideration of ₹ 32,89,686/-. The said transaction was subject to Securities Transaction Tax (STT). The appellant reported a loss of ₹ 1,19,32,012/- on account of disposal of such investment in the books of account. The said loss was mentioned in the computation of total income. The AO examined the same and granted the benefit of carry forward of said loss. However, the AO in its order u/s 154 rejected the claim of carry forward holding that since any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed provisions of law and the judgment of the Hon ble Gujarat High Court passed in Kishorebhai Bhikhabhai Virani vs. ACIT 367 ITR 261 (Guj). The Ld. DR further submitted that the Hon ble Court has decided the identical issue against the assessee holding that loss arising on sale of capital assets covered u/s 10 (38) would not be available for set off as the loss would not be includible in computation of assessee s income. The Ld. DR further submitted that since the assessee s case is directly covered by the judgment aforesaid, in favour of the revenue, the finding of the Ld. CIT(A) is erroneous and the same is liable to be set aside. 7. On the other hand, the Ld. counsel for the assessee relying on the findings of the Ld.CIT (A) submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Mumbai Tribunal is based on the judgment of the Hon ble Kolkata High Court passed in the case of Royal Calcutta Tuff Club vs. CIT 144 ITR 709, there is no infirmity in the order of the Ld. CIT(A) to interfere with the same. 8. We have heard the rival submissions and also gone through the entire material on record including the orders passed by the authorities below and the cases relied upon by the said authorities. The only issue to be determined in this case is whether the Ld. CIT (A) has erred in directing the AO to allow the Long Term Capital Loss of ₹ 1,19,32,012/- to carry forward the same ignoring the fact that the transaction is covered within the provisions of section 10(38) of the Act. We notice that the Ld. CIT (A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates permissibility and possibility of the carried forward loss being absorbed or set off against the profits and gains profit to reduce the tax demand. It was held that if such set off is not permissible or possible owing to the income or profits of the subsequent year being from a non-taxable source, there would be no point in allowing loss to be carried forward . Conversely, if the loss arising in the previous year was under a head not chargeable to tax, it could not be allowed to be carried forward and absorbed against income in a subsequent year, from a taxable source. 9. Since, the Hon ble Gujarat High Court has decided the identical issue in favour of the revenue in the case discussed above, we do not find merit in the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which deals with the set-off and carry forward of losses, no exception has been made with regard to long term capital gains/losses arising on sale of equity shares on which Security Transaction Tax has been paid. 4. The Respondent prays such Long Terms capital loss ₹ 11,932,012/- should be allowed to be carried forward fro set-off in the subsequent years. 2. The Ld. counsel for the assessee reiterated the arguments advanced in revenue s appeal aforesaid to substantiate the grounds of cross appeal. Similarly, the Ld. DR also reiterated his arguments made in revenues appeal aforesaid. 3. Since, we have allowed the appeal of the revenue, the present cross objection has become infructuous. We, therefore, dismiss the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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