TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1646
X X X X Extracts X X X X
X X X X Extracts X X X X
.... normal provision. 2. The appellant craves leave to add, amend, alter, edit, delete, modify, or change all of appeal at the time of or before the hearing of the appeal." 2. The assessee is an AOP engaged in the business of share trading. The assessee filed the return of income for AY 2015-16 on 29.09.2015 declaring a total income of Rs.9,49,00,320/-. In the return of income the assessee declared Short Term Capital Gains (STCG) after adjusting the Short Term Capital Loss (STCL) as per below working: Particular STCG on Equity (taxable u/s.111A @ 15%) - Rs. STCG on Debts (taxable @ normal rate) - Rs. STCG 29,00,610 1,78,56,119 Less : STCL on Debts Nil (2,99,547) STCL on Equity Nil (43,75,895) STCG offered to tax 29,00,610 1,31,80,677 3. The return was processed under section 143(1) of the Income Tax Act 196 (the Act) where in the STCL on equity which was adjusted against the STCG on debts was not allowed. Accordingly the income was assessed at Rs. 9,92,76,220/-. The assessee filed petition for rectification under section 154 of the Act and the order was passed without allowing the adjustment of STCL as claimed by the assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 70(2) of the Act does not prevent the set off of STCG against the STCL and wherever the intention of the legislature is to restrict the intra head setoff it has been explicitly provided in the provisions of the Act. The ld. AR further submitted that the impugned issue is settled by various decisions of the Co-ordinate Bench and that the Hon'ble Calcutta High Court in the case of CIT v. Rungamatee Trexim (Pvt.) Ltd. [2008] (ITA No. 812 of 2008) while considering a similar issue has taken a view in favour of the assessee. The ld AR also placed reliance on the order of the coordinate bench in the case of iShare MSCI EN UCITS ETF USD ACC vs DCIT(IT) [(2024) 164 taxmann.com 56 (Mumbai Trib)] 5. The ld. DR on the other hand submitted that the wordings used in section 70(2) which contains provisions with regard to set off of STCL states that the set off should be allowed for 'similar computations' which would mean that the computations which are subject to similar tax. The ld. DR therefore, argued that the STCL which is taxed at 15% cannot be allowed to be set off against the Capital Gain which is taxed at 30%. 6. We heard the parties and perused the material on record....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere is no prohibition nor the Act compels the assessee to first set off short term capital gain with STT against short term capital loss with STT and then allows set off against short term capital gain without STT. In absence of any specific mode of set off provided in the Act and in absence of any prohibition and in absence of any specific chronology for set off prescribed in the Act, the assessee wan entitled to exercise his option with regard to the chronology of set off which was most beneficial to the assessee. It is settled proposition of law that when a provision of the Act gives option to the assessee, such option should be exercised which will favour the assessee and not the revenue. The A/R for the assessee was well justified in relying on the decision of the Calcutta High Court and the Circular of the Board dated 7.7.1955 since the principles laid down therein appeared to be fully applicable." The Commissioner of Income Tax (Appeals) therefore cane to the conclusion in favour of the assessee. He further came to the conclusion that the disallowance has been made on presumption. In these circumstances, the order passed by the Commissioner of Income Tax an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ain on which securities transaction tax is paid still remains, such gains are set of against available brought forward short term capital loss One short-term capital gain on which no securities transaction tax is paid is proposed to be taxed at the rate of 30% the brought forward short term capital loss is allowed to be carried forward without utilizing such brought forward short-term capital loss was set off 18. Provisions of section 70 of the income tax act provides for the set off of losses from one source against income from another source under the same head of income. According to section 70 (1) where assessee suffers loss in respect of any source under any head of income other than capital gain, assessee is entitled to have the amount of such loss set of against his income from any other source under the same had. Therefore, these provisions speaks about inter head adjustment other than the head of capital gains. For capital gains provisions of section 70 (2) of the act provides that where assessee suffers short-term capital loss, assessee shall be entitled to set off such losses against capital gain computed in a similar manner as under section 48 to 55 of the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g the decision of the honourable Calcutta High Court, and several other judicial precedents of the coordinate benches relied upon before us, we allow ground number 4 - 10 of the appeal of the assessee and direct the assessing officer to allow set-off of short-term capital loss suffered by the assessee against short-term capital gain of Rs. 791,221/-." 8. We further notice that in the case of First State Investments (Hongkong) Ltd. vs ADITIT) [(2011) 8 ITR(T) 315 (Mum-Trib)] under similar situation, the Assessing Officers rejected Assessee's manner of set-off of STCL in category liable to tax at 15% against STCG taxable at 30%. The Revenue made similar argument as is made in the instant case with regard to expression used in section 70(2), i.e., 'under similar computation'. The Co- ordinate Bench rejected arguments of the Department by holding as under: "12. A lot of emphasis has been laid by the learned CIT(A) on the words "under similar computation made" as used in sub-section (2). He has opined that there are two different categories of the transactions resulting into short-term capital gain, viz., those taxable in the first period at the rate of 30 per ce....