2015 (2) TMI 807

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....e Tribunal was justified in law in confirming the disallowance of the appellant's claim regarding set off and carried forward of long-term capital loss of Rs. 1,44,73,463 against the long-term capital gain of Rs. 1,03,00,809 for the same assessment year ?                B. Whether, on the facts and in the circumstances of the case, the appellant's claim with regard to set off and carried forward of long- term capital loss of Rs. 1,44,73,463 can be disallowed on the basis of the decisions of the hon'ble apex court in the case of CIT v. Har prasad and Co. P. Ltd. [1975] 99 ITR 118 (SC) and the Madras High Court in the case of CIT v. S. S. Thiagarajan [1981] 129....

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.... off) on sale of shares of one Karp Diamond Ltd. Such long-term capital gain was charged under section 45 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). In the return that the assessee filed, it had claimed set off of the capital loss of Rs. 1.44 crores against the capital gain of Rs. 1.03 crores. The Assessing Officer disputed such claim and after hearing the assessee disallowed the same holding that the loss from exempt source can neither be allowed as set off nor can be allowed to be carried forward and absorbed against income in subsequent years from the taxable source. 3. The issue ultimately reached the Tribunal. The Tribunal by the impugned judgment ruled in favour of the Revenue and against the assessee, basing....

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....y, under the head of "Capital gains" assessable for that assessment year in respect of any other capital asset other than a short-term capital asset. For the reasons mentioned hereinafter, in view of the facts of this case, it was not open for the assessee to claim set off of the loss in sale of shares of Suashish Diamond Ltd. Perhaps section 74 of the Act may have otherwise also no applicability because it refers to carry forward of the capital loss set off against capital gain of the subsequent year, which is not the case in the present case. Section 70 of the Act refers to income from any other source under the said head of "Income". Sub-section (3) thereof which is relevant for our perspective reads as under :     &....

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....ori ented fund where-                (a) the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004, comes into force ; and                 (b) such transaction is chargeable to securities transaction tax under that Chapter : Provided that the income by way of long-term capital gain of a company shall be taken into account in computing the book profit and Income-tax payable under section 115JB." 7. The fact that the capital asset in question, namely, the shares of Suashish Diamond Ltd. was covered under section....