United Investments v. ACIT I.T.A. No. 511/Kol/2017 1 July, 2019
Loss---Carry forward and set-off---Long-term capital loss on sale of shares---AO denying assessee's claim in view of exemption available to long-term capital gain under section 10(38)
Income Tax Act, 1961, Section 10(38) Income Tax Act, 1961, Section 74
Conclusion: Section 10(38) excludes in express terms only income arising from transfer of long- term capital asset being equity share or equity fund which is chargeable to STT and not entire source of income from capital gains arising from transfer of shares. It does not lead to exclusion of computation of capital gain of long-term capital asset or short-term capital asset being shares. Accordingly, long-term capital loss on sale of shares had to be allowed to be carried forward under section 74.
Assessee sold its holdings in different listed companies and derived long-term capital gain of Rs. 77,330 and incurred long-term capital loss of Rs. 6,05,425. AO held that long-term capital gain derived on sale of listed shares fulfilled conditions prescribed in section 10(38) and was, therefore, exempt from income-tax.
With regard to claim of long-term capital loss held that since gain derived from sale of long term listed shares was exempt then any loss incurred there from had to be ignored. He accordingly denied assessee's claim for carry forward of long-term capital loss under section 74. Held: Section 10(38) excludes in express terms only income arising from transfer of long- term capital asset being equity share or equity fund which is chargeable to STT and not entire source of income from capital gains arising from transfer of shares. It does not lead to exclusion of computation of capital gain of long-term capital asset or short-term capital asset being shares. Accordingly, long-term capital loss on sale of shares had to be allowed to be carried forward under section 74.
Decision: In assessee's favour.
Followed: Raptakos Brett & Co. Ltd. v. Dy. CIT Cen. Cir 46, Mumbai in [ITA Nos.3317/Mum/2009 & 1692/Mum/2010, dt. 10-6-2015] : 2015 TaxPub(DT) 2490 (Mum-Trib). |
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