9911796707
TMI Blog2017 (4) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... and in disposing the appeal of the appellant on the following grounds : i. In denying the appellant the ability to offset short-term capital losses ('STCLs') first towards short-term capital gains ('STCGs') generated from transactions in derivatives and then subsequently towards STCGs from sale of equity shares which were subject to securities transaction tax ('STT'). ii. In adopting a mechanism to offset STCLs, which is not in accordance with the rights of the appellant and contrary to the learned CIT(A)'s own comments in the order. iii. In holding that the provisions of sections 70 and 71 of the Act have no role to play in determining computation of tax due on STCGs under section 115AD of the Act. iv. In failing to recognise that comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,80,444/- from sale of equity shares which are subject to STT and Rs. 3,78,56,372/- from transactions in derivatives. 3.1 The Assessing Officer (AO) accepted the total income of the assessee of Rs. 7,24,36,816/- as disclosed in its return of income. The AO has set off Short Term Capital Loss (STCL) of Rs. 14,423,525/- arising on sale of shares on which STT has been paid (which are taxable @ 15%) against the STCG of Rs. 34,580,444/- arising on sale of shares on which STT has been paid, resulting in net STCG of Rs. 20,156,919/-. Further the AO has set off STCL of Rs. 89,228,278/- arising from transactions in derivatives (which are taxable @ 30%) against the STCG of Rs. 141,508,175/- arising on transactions in derivatives resulting in net STC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im (P) Ltd. (2008) (ITA No 812 of 208) (Calcutta High Court) (Unreported). 6. On the other hand, the learned DR relies on the order of the learned CIT(A). 7. We have heard the rival submissions and perused the relevant material on record. We begin with the decisions cited before us. In First State Investments (Honkong) Ltd. (supra), the assessee earned STCG on sale of shares in the A.Y. 2005-06. It bifurcated such STCG into two periods i.e. upto 30.09.2004 (in which tax was chargeable @ 30% and transactions were not chargeable to STT) and period post 30.09.2004 (in which case the reduced rate of 10% was applicable on STCG where transactions were chargeable to STT in view of section 115A). As against this, the assessee had also suffered ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce 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 was 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. ´ 8. To sum up, under the provisions of section 70(2), STCL arising from any asset can be set off against STCG arising from any other asset under a similar computation made. Merely because the two set of transactions are liable for different rate of tax, it canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
