1997 (9) TMI 99

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....ction 80T on the gross long-term capital gains before adjustment of the short-term capital loss ?" The facts giving rise to this reference are as follows : The assessee is an individual having income from business, dividends and interest. During the previous year relevant to the assessment year 1976-77, the assessee suffered a short-term capital loss of Rs. 17,750 and had a long-term capital gain of Rs. 34,454. In the assessment of the assessee under the Income-tax Act, 1961 ("the Act"), for the above assessment year, the Income-tax Officer pooled together the income under all heads, as a result whereof, the short-term capital loss of Rs. 17,750 got set off against the income under other heads including the long-term capital gains of ....

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....u revisional power under section 263 of the Act, he directed the Income-tax Officer to reduce the deduction under section 80T from Rs. 16,781 to Rs. 9,681. The assessee appealed to the Income-tax Appellate Tribunal ("the Tribunal"). The case of the assessee before the Tribunal was that deduction under section 80T was allowable on the entire amount of long-term capital gains without adjustment of short-term capital losses. The Tribunal accepted this contention of the assessee and held that relief under section 80T was admissible on the amount of long-term capital gains without any deduction therefrom of short-term capital losses. In that view of the matter, the Tribunal cancelled the revisional order of the Commissioner passed under secti....

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.... it is clear that the deduction is available to an assessee (not being a company) whose income includes any income chargeable under the head "Capital gains" relating to capital assets other than short-term capital assets, referred to as "long-term capital gains". It is made abundantly clear in the section itself that the capital gains referred to therein do not include short-term capital gains. The deduction is available only in respect of long-term capital gains. The expression "such income" appearing in the above section refers to the long-term capital gains included in the total income of the assessee and not to capital gains from all types of assets or the total income itself. That being so, deduction under this section has to be made f....