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Issues involved: Appeal by Revenue against CIT(A) order regarding set off of short-term capital loss against short-term capital gains for different periods within the same previous year.
Summary: The appeal by the Revenue was against the order passed by CIT(A) for the assessment year 2005-06, specifically challenging the direction given by CIT(A) regarding the set off of short-term capital loss against short-term capital gains for different periods within the same previous year. The primary grievance was related to the application of different tax rates for the specified periods and the computation of gains without considering the corresponding loss. The assessee, a Foreign Institutional Investor (FII), had claimed set off of short-term capital loss against short-term capital gains for two distinct time periods - from 01.04.2004 to 30.09.2004 and from 01.10.2004 to 31.03.2005. The Assessing Officer (AO) noted the application of different tax rates under sections 111A & 115AD for the two periods and deemed the assessee's method of set off as incorrect. The AO computed short-term capital gains for each period and taxed the net gains after adjusting for the losses. The CIT(A) disagreed with the AO's approach and supported the computation made by the assessee. The assessee's counsel referred to similar cases decided by the Mumbai Bench of the Tribunal, where it was held that short-term capital loss incurred after 01-10-2004 could be set off against gains earned before 30-09-2004. The Departmental Representative (D.R.) acknowledged the similarity of facts with the precedent cases and did not contest the decision. After considering the submissions and precedents, the Appellate Tribunal upheld the CIT(A)'s decision, concluding that there was no justification for interference. Consequently, the Revenue's appeal was dismissed, and the order was pronounced on the 20th day of August, 2010.
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