1978 (2) TMI 21 - HC - Income Tax

Summary

Issues involved: Interpretation of relief u/s 80T on capital gains and short-term capital loss.

Summary:
The case involved the interpretation of relief u/s 80T on capital gains and short-term capital loss. The assessee, an individual, had long-term capital gains from the sale of immovable property and short-term capital loss from the sale of shares. The Income Tax Officer (ITO) set off the short-term capital loss against the capital gains before applying s. 80T, resulting in a lower relief amount for the assessee. The Appellate Tribunal, on appeal, allowed a higher relief amount based on the assessee's contention that the capital gains should be considered before adjusting the short-term capital loss. The Tribunal's decision was challenged by the revenue.

Section 80T allows for a deduction from long-term capital gains, and the interpretation of this provision was crucial in this case. The court emphasized that the income chargeable under the head "capital gains" relating to capital assets should be considered for applying s. 80T. The court drew parallels with a similar provision, s. 80E, and a previous case where the deduction was allowed based on the profits and gains attributable to priority industries, irrespective of set-off adjustments. Applying the same principle, the court held in favor of the assessee, allowing a higher relief amount based on the interpretation of s. 80T.

In conclusion, the court answered the question in the affirmative, ruling in favor of the assessee and awarding costs. The judgment highlighted the importance of interpreting tax relief provisions accurately to ensure fair treatment for taxpayers.