Tribunal allows appeal on capital gains set off, rules amended provisions apply universally. Interest levy deleted.

The Tribunal partly allowed the appeal by upholding the decision on the set off of long-term capital loss against short-term capital gain for the assessment year 2003-04. The Tribunal ruled that the amended provisions applied to losses for any assessment year, not just for the year 2003-04. Additionally, the Tribunal deleted the interest levied under section 234D, as this provision was not applicable to the assessment year in question.

---

---

Issues involved:
1. Set off of long-term capital loss against short-term capital gain.
2. Levy of interest under section 234D.

Issue 1: Set off of long-term capital loss against short-term capital gain:
The appeal was against the order of CIT(A) for the assessment year 2003-04, where the assessee disputed the disallowance of setting off long-term capital loss from the assessment year 2000-01 against short-term capital gain for the year 2003-04. The Assessing Officer (AO) did not accept the claim based on the amended provisions from the year 2003-04, which allowed long-term capital loss to be set off only against long-term capital gain. The assessee argued that the amended provisions should apply only to losses computed for the first time in 2003-04. The Tribunal upheld the CIT(A)'s decision, stating that the amended provisions applied to losses for any assessment year, not just for the year 2003-04. The Tribunal also referred to a similar case involving Reliance Jute & Industries Ltd. to support its decision.

Issue 2: Levy of interest under section 234D:
Section 234D provides for the levy of interest when a refund issued to the assessee under section 143(1) is later found to be excessive at the time of assessment. However, this section was inserted by the Finance Act, 2003, and is applicable only from the assessment year 2004-05. Since the assessment year in question was 2003-04, the Tribunal held that the provisions of section 234D were not applicable to the assessee. Citing a decision by the Special Bench of the Tribunal in the case of ITO v. Ekta Promoters (P) Ltd., the Tribunal ruled that the levy of interest was not justified and set aside the order of CIT(A) regarding the interest levied.

In conclusion, the Tribunal partly allowed the appeal of the assessee by upholding the decision on the set off of long-term capital loss against short-term capital gain and deleting the interest levied under section 234D for the assessment year 2003-04.

---