TaxTMI 
TaxTMI 
2009 (8) TMI 856
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....Income-tax Act, 1961 ('the Act'), and other related material, the Appellant respectfully submits that the learned Commissioner of Income-tax (Appeals)-XXXIII, Mumbai. Erred in- 1. In confirming the action of Additional Director of Income-tax (International Taxation) - 3(2) ('the Assessing Officer') of disallowing the set-off of short-term capital loss under section 111A against the short-term capital gains under section 115AD. 2. In confirming the action of the Assessing Officer of levying interest under section 234B of the Act. That the Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at the time of hearing of the appeal, so as to enable Hon'ble Income-tax ....
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....urbed by the Assessing Officer. The core of the controversy is the bifurcation of such short-term capital gain into two periods, i.e., up to September 30, 2004 in which tax is chargeable at the rate of 30 per cent and the transactions are not chargeable to securities transactions tax and the period post September 30, 2004 in which case reduced the rate at the rate of 10 per cent is applicable on short-term capital gain where the transactions are chargeable to securities, transaction tax. The case of the assessee is that the short-term capital loss in the later period be allowed set-off against the short-term capital gain of the former period to the extent of the excess of short-term capital gain over the short-term capital loss to the cut-o....
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....e transactions spread over the year, both before and after the cut-off date. Effectively the question is about the setting-off of short-term capital loss and such set-off is governed by sub-section (2) of section 70, which has been reproduced above. Primarily the use of word "any" to represent the transaction which resulted in the short-term capital loss or short-term capital gain, as the case may be, form each transaction distinctly. Suppose the assessee entered into one transaction of purchase and sale of the shares of company 'A', which resulted into Short-term capital loss and there are other 9 transactions of purchase and sale of shares which resulted into short-term capital loss or short-term capital gain as the case may be, it is man....
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....er the choice on the assessee in the matter of setting-off of the short-term capital loss suffered in the post cut-off date against the short-term capital gain of the pre-cut off date, it would have clearly set out such intention in the language of sub-section (2) itself, as has been done in sub-section (3). In the absence of any stipulation in this regard in sub-section (2), we are satisfied that the choice has been left over to the assessee in taking decision about the setting-off of short-term capital loss from one transaction against any other short-term capital gain, whether within or outside the cut-off date. If higher benefit pours in from the exercise of the option in a particular way vis-a-vis the lower benefit resulting in the oth....
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..... It is simple and plain that the matter of computation of income is a subject which comes anterior to the application of the rate of tax. Only when the income is computed as per the provisions of the Act, that the question of the applicability of the correct rate of Income-tax comes into being. Income under the head 'capital gains' is determined as per sections 45 to 55A. Section 48 with the heading 'Mode of computation' provides that the income chargeable under the head "capital gains" shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset, the expenditure incurred wholly and exclusively in connection with such transfer and the cost of acquisition of th....