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TMI Blog2018 (12) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... section (3) of section 71, the assessee is not allowed to set off capital loss against income under any other head. The above view is fortified by the decision of ‘Coated Fabrics (P) Ltd. vs JCIT’ [2006 (1) TMI 228 - ITAT PUNE-A]. No justification on the part of the lower authorities in making the impugned adjustments and, therefore, the same are set aside. The Assessing officer is directed to accept the returned income /computation of the assessee, as such. - Decided in favour of assessee. - ITA No. 1650/CHD/2017 - - - Dated:- 4-10-2018 - SHRI SANJAY GARG, JUDICIAL MEMBE AND Ms. ANNAPURNA GUPTA, ACCOUNTANT MEMBER For The Appellant : Sh. Navneet Sehgal, CA For The Respondent : Smt. Chanderkanta, Sr. DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed vide 1961 Act and further substituted by Finance Act 1961 w.e.f. 1.4.1962 and further substituted by Finance Act 1967 w.e.f. 1.4.1968 (as above) and further substituted by Finance Act 1987 are also relevant. 1961 - As originally enacted this section read as under:- Set off of loss from one head against income from another 71. Where in respect of any assessment year the net result of the computation under any head of income, other than Capital gains , is a loss and the assessee has no income under the head Capital gains , he shall, subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income assessable for the assessment year under any other head. Provided th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income, if any, assessable under any head of income other than capital gains. The effect of this was to number the earlier section as subsection(1), with verbal changes, delete the original proviso and insert sub-section(2) 1967 Sub-section (2) was substituted by the following subsections (2) and (3) by the Finance (No. 2) Act 1967 with effect from I April 1968 : (2) Where in respect of any assessment year, the net result of the computation under any head of income, other than Capital gains , is a loss and the assessee has income assessable under the head Capital gains , such loss may, subject to the provisions of this Chapter, be set off - (i) against his income, if any, of the assessee assessable for that asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome from another- 71. (1) Where in respect of any assessment year the net result of the computation under any head of income, other than Capital gains , is a loss and the assessee has no income under the head Capital gains , he shall, subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head. (2) Where in respect of any assessment year, the net result of the computation under any head of income, other than Capital gains , is a loss and the assessee has income assessable under the head Capital gains , such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year and so on : .... 6. A perusal of the above Legislative history reveals that the assessee has always been given an option to set off his losses against the income from capital gains. However, as per the provisions of sub section (3) of section 71, the assessee is not allowed to set off capital loss against income under any other head. The above view is fortified by the decision of the Pune Bench of the Tribunal in Coated Fabrics (P) Ltd. vs JCIT [2006] 285 ITR (AT) 148 (Pune). 7. In view of this, we do not find any justification on the part of the lower authorities in making the impugned adjustments and, therefore, the same are set aside. The Assessing officer is directed to accept the returned income /computati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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