TMI Blog1996 (1) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 even when the assessment is made on a positive total income of Rs. 34,586. 3. In short, the facts of the case are that the assessee has declared a loss of Rs. 1,05,000 against the share transactions as business loss and also has shown capital gain of Rs. 76,301 on sale of investment relating to the stock of the assessee shown in his shareholding with several companies including that of Texmaco Ltd. The assessee has earned capital gain of Rs. 76,301 as the shares relating to Texmaco Ltd. have been sold. According to the ITO the assessee claimed the set off of loss on the regular dealing in shares against this profit. The details and particulars of purchases and sales of the shares were furnished and were examined by the ITO. In his ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT [1981] 129 ITR 156 (Ker.); (iv) Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (SC); (v) CIT v. Amul Transmission Line Hardware (P.) Ltd. [1976] 104 ITR 771 (Guj.). Being aggrieved by the order of the DC (Appeals) the assessee has preferred this appeal to the Tribunal. 5. The learned counsel for the assessee Sri G.P. Agrawal invited our attention to the provisions of section 71(2) and 80T and submitted that on the facts and circumstances of the case the assessee is entitled to deduction under section 80T. He also contended that the business loss on purchase and sale of shares is separate and the capital gain on sale of share investment is shown under separate head and, therefore, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both types of purchase and sale of shares, he has erred in adjusting the capital gain against loss on share transaction without granting deduction under section 80T. Before the DC (Appeals) the assessee had already made it very clear in its grounds of appeal that the capital gain has arisen out of sale of long term shares investment and, therefore, is entitled to deduction under section 80T but in spite of that the DC (Appeals) allowed the set off of business loss against the long term capital gain and denied the benefit of deduction under section 80T to the assessee. The case laws on which he has relied do not help the cause of the Revenue because the facts and circumstances of the cases are altogether different, and the gross total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clearly applicable and the loss suffered by the assessee-company in its share trading transactions inclusive of interest paid on borrowed moneys attributable to that business was rightly treated by the Tribunal as a loss in speculative business. The ratio of this decision is also not applicable to the instant case as neither the question of investment-company nor the question of a loss in speculation business is involved in the case of assessee. 11. Sri Sinha has also relied on the Supreme Court decision in the case of M.S.P. Nadar Sons where the assessee had earned long term capital gain on sale of shares of some companies and had also suffered long-term capital loss on sale of shares of other companies in the same previous year it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share investment as an asset. Accordingly, in our opinion, this decision also does not help the cause of the Revenue. 13. On the other hand we find that the argument and contentions of the learned counsel for the assessee Sri G.P. Agrawal hold good and get support from the Calcutta High Court decision in the case of B.K. Birla wherein it was held as under : " Where the gross total income of an assessee is a positive figure and even after set off of the short term capital loss against other income there would be still a positive income in such a case, loss of short-term capital assets should not be set off first against the long term capital gains so as to deprive the assessee of the relief available under section 80T(b). The position wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital gains. " Having considered all the facts and circumstances of the case and having gone through all judicial pronouncements we have come to the conclusion that on the facts and in the circumstances, the case of the assessee is squarely covered by the Supreme Court decision in the case of V. Venkatachalam. We, therefore, respectfully follow the ratio of the Hon'ble Supreme Court's decision and hold that the orders of the Assessing Officer and the DC (Appeals) are not in accordance with the provisions of law and, therefore, their orders are vacated and the Assessing Officer is directed to allow the deduction under section 80T on capital gain of Rs. 76,301 without deduction or adjustment of business loss. 15. In the result, the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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