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TMI Blog2011 (11) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Services. In respect of the assessment year 1992-1993, he admitted share income from the firm comprised of loss of Rs.1,75,537/- under the head "business", long term capital gains of Rs.3,97,680/-, and short term capital gains of Rs.30,179/-. From the long term capital gains, the assessee claimed deduction under Section 48(2) of the Income Tax Act, 1961 (for brevity, "the Act"). The Assessing Officer has completed the assessment without considering the plea for deduction on long term capital gains. 2.2. On appeal, the Commissioner of Income Tax (Appeals) held that the assessee was not entitled to deduction under Section 48(2) of the Act in respect of the capital gains received from the firm, on the basis that in the hands of the firm the deduction has already been allowed under Section 48(2) of the Act while assessing the capital gains of the firm. 2.3. It was against the order of the Commissioner of Income Tax (Appeals), a further appeal was filed by the assessee before the Tribunal. The Tribunal, by the impugned order, has dismissed the appeal holding that the long term capital gains having been assessed already in the hands of the partnership firm, the assessee can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be the intent of the lawmakers. 4.2. It is also his submission that the assessee cannot rely upon Section 80T of the Act. In any event, it is submitted that the said section which has been relied upon by the learned counsel for the appellant has been repealed with effect from 1.4.1989. 5. We have heard the learned counsel for the assessee as well as the Department and considered the entire factual matrix. 6. Chapter VI-A of the Act allows deductions to be made in computing total income. Section 48 of the Act which stood during the relevant point of time is as follows: "Section 48. Mode of computation and deductions. (1) The income chargeable under the head Capital gains shall be computed,- (a) by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely : (i) expenditure incurred wholly and exclusively in connection with such transfer; (ii) the cost of acquisition of the asset and the cost of any improvement thereto: Provided that in the case of an assessee, who is a non-resident Indian, capital gains arising from the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain so arrived at relating to equity shares of venture capital undertakings, (A) in the case of a company, other than venture capital company, thirty per cent of the amount of such gain in excess of fifteen thousand rupees; (B) in the case of venture capital company, sixty per cent of the amount of such gain in excess of fifteen thousand rupees; (C) in any other case, sixty per cent of the amount of such gain in excess of fifteen thousand rupees; (ii) in respect of long-term capital gain so arrived at relating to capital assets other than capital assets referred to in sub-clauses (i) and (ia), (A) in the case of a company, thirty per cent of the amount of such gain in excess of fifteen thousand rupees; (B) in any other case, sixty per cent of the amount of such gain in excess of fifteen thousand rupees: Provided that where the long-term capital gain relates to both categories of capital assets referred to in sub-clauses (i) and (ii), the deduction of fifteen thousand rupees shall be allowed in the following order, namely: (1) the deduction shall first be allowed against long-term capital gain relating to the assets m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any loss under the head Capital gains in so far as it pertains to any long-term capital asset and, for the this purpose, any reference in that sub-section to the amount of long-term capital gain arrived at after making the deductions under clause (a) of sub-section (1) shall be construed as reference to the amount of loss arrived at after making the said deductions." 7. Under Section 48(1) of the Act, the deduction in respect of the full value of the consideration received or accrued regarding the expenditure incurred wholly, etc. and cost of acquisition of asset and the cost of improvement are granted. This deduction has admittedly been granted from the capital gain in the hands of the partnership firm. Section 48(1)(b) of the Act, extracted above, shows that the capital gain arising from the transfer of a long term capital asset is entitled to further deduction specified in sub-section (2). 8. Mr.T.N.Seetharaman, learned counsel for the appellant contends that Sections 48(1) and 48(2) of the Act have to be read separately and according to him, what is contemplated under Section 48(1)(b) of the Act regarding further deduction as enumerated under Section 48(2) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med by the partner once again in his hands in respect of his share of long term capital gains. 12. The analogy made by the learned counsel to Sections 80A(3) and 80T of the Act cannot be made applicable to the facts of the present case. The present assessment being of the year 1992-1993, after the Direct Tax Laws (Amendment) Act, 1989 came into effect from 1.4.1989 by which Section 80T of the Act came to be omitted, the taxing structure in respect of the firm and individual partner were different when compared to the legal position after the said date, namely 1.4.1989. Simply because by change of law nominal tax has been imposed on the firm and in the hands of the partner different tax amount has been imposed, there can be no comparison between the same. Therefore, we do not agree with the contention raised by the learned counsel for the appellant by relying upon the said provisions that the negative provision should be read in favour of the assessee. 13. The reliance placed on the judgment of this Court in Express Newspapers Ltd. case, supra, has no application to the facts of the present case. That was a case relating to the deduction of interest paid on equitable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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