9911796707
TMI Blog1981 (7) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... re to do in a letter dt. 2nd Dec, 1978 addressed to the ITO. At the time of the hearing before the Commr. (Appeals), the assessee's case was as stated in paragraph 8 of the order of the CIT (A) reproduced below: " 8. The appeallant's case is that the total income should be computed as follows: .. Rs. Rs. Salary, property & other sources . 1,62625 Less : Short-term Capital loss . 34,910 Balance . 1,27,715 Add : Long-term Capital gain . 28,324 . . 1,56,039 Deduct : . . 80L 3,000 . 80C 11,000 . 80T 5.000-100 per cent 5,000 . 23, 324-40 per cent 14,328 . . . 28,328 . . .1,27,711 The ITO set off the short-term capital loss of Rs. 29,160 against the long-term capital gains of Rs. 22,574 and allowed only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort to the assessee's claim that just before the assessment proceeding came to an end the Chartered Accountant appearing on behalf of the assessee had revised the stand and requested the ITO to set off the short-term capital loss against income from other heads of income excluding long-term capital gains. 4. He further argued that the provision of s. 70(2)(i) gave a privilege and benefit to the assessee to set off the short-term capital loss against short-term capital gains or long-term capital gins and that the set off of the short-term capital loss against long-term capital gains cannot be foisted or forced on the unwilling assessee by the ITO by purporting to set under s. 70(2)(i). He therefore, argued that the long-term capital gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g them off against short-term capital loss earlier. As in the present case, the short-term capital loss was larger, it was argued that there was no question of giving any deduction under s. 80T. He further pointed out that the provisions of s. 70(2)(i) made it incumbent upon the ITO set off the short-term capital loss against the long-term capital gains. For this purpose, he referred to the different phraseology used in s. 70(2)(ii). 6. We have considered the rival connection advanced by both the sides. In this connection, it would be better to reproduce ss. 70(2) and 71(3) below: "70(2)(i) where the result of the computation made for any assessment year under sections 48 to 55 in respect of any short-term capital asset is a loss, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to set off the short-term capital loss against income under any other head of income, other than capital gains. It was, however, strenuously pressed upon us by the Deptl. Rep. that by the letter written in Sep 1978 to the ITO the assessee sought to exercise the option of setting of the short-term capital loss against the long-term capital gains. It was, however, pointed out by the assessee that before the assessment was completed on oral argument was advanced that the option that the assessee would like to exercise afresh was that the short-term capital loss should be set off against income under other heads excluding long-term capital gains. This is a pure question of law and whether the assessee did change his stand before the ITO o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee under one head can beset off against income profits or gains under any other head, particularly where the total income includes items of income which 'tax free". For instance, for an assessment year the material figures in the case of an assessee, are as follows: Interest on tax-free securities under Rs. section of the 1922 Act 6,000 Property income under section 9 of the 1922 Act 13,000 Loss in business (other than in speculative transactions) under section 10 of the1922 Act 5,000 Total 14,000 An ITO proposes to set off the loss of Rs. 5,000 against tax free income of Rs. 6,000 and to tax Rs. 13,000 out of total income of Rs. 14,000. On the other hands, the assessee contends that the loss of Rs. 5,000 shall be set off ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
