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TMI Blog2013 (5) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... n STT paid) chargeable to tax at normal rate @ 30% is correct. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact of the case that whether Short Term Capital Loss eligible to tax @ 10% can be set off against short term capital gain eligible to tax @ 30% even in a case where the assessee has another short term capital gain eligible to tax @ 10%. On the facts and in the circumstances of the case and inlaw, the Ld. CIT(A) has erred in applying the decision of the Hon ble ITAT in the case of JCIT-Vs- Montgomery Emerging Markets Fund {100 ITD 217} to the facts of this case. The Appellant prays that the order of the Ld. CIT(A) on the above ground(s) be set aside and that of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remain the same. The dispute is only about the choice of setting off of short-term capital loss suffered after the cut-off date against the short-term capital gain earned prior to the cutoff date. This position has arisen due to the introduction of section 111A for the first time from this year only which provides for lower rate of tax on short-term capital gains arising on the transactions which have suffered securities transaction tax. It is further pertinent to mention that such dispute is relevant only for the first year of the operation of this provision and cannot crop up in the later years. Here we are concerned with the set-off of short-term capital loss from one or more transactions with the short-term capital gain from one or more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt-term capital gain in any or the other 9 transactions. The relevant words used somewhere in between sub-section (2) are that the assessee shall be entitled to have the amount of such loss set-off against the income in respect of any other capital asset. Prima-facie there is cue in the language of the subsection that the option is with the assessee and he will decide as to whether the short-term capital loss from the first transaction ought to be set off against the short-term capital gain of the transaction No.2 or 3 or 4, etc., as the case may be. Our view about the vesting of the discretion in assessee for the purposes of set-off of short-term capital loss against any short-term capital gain is fortified when the language of sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... most similar view was taken allowing the assessee to exercise option in V.R. Nimbkar s case (supra). A lot of emphasis has been laid by the learned CIT(A) on the words under similar computation made used in sub-section (2). He has opined that there are two different categories of the transactions resulting into short-term capital gain, viz., those taxable in the first period at the rate of 30 per cent and those taxable in the second period at the rate of 10 per cent and similar computation made refers to either of the two. In our considered opinion, there is a basic fallacy in the view adopted by the learned CIT(A) on this issue. Sections 111A and 115D fall in Chapter XII, which provides for determination of tax in certain special ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oing discussion we hold that the authorities below erred in negating the assessee s computation of short term capital gain. We, therefore, overturn the impugned order and allow this ground of appeal. Similar view has been taken by the ITAT in other judgments also relied upon by the Ld. A.R. Therefore, following the same, I hold that set off of loss of short term capital gains as claimed by the assessee is correct in view of the said judgment of the ITAT. Accordingly, the appeal is allowed . 6. Taking into consideration the above cited cases and as per the extracted portion of First Investment (Hong Kong) Ltd. (supra), the CIT(A) allowed the assessee s contention. As mentioned above, AR also placed the decision of DWS India Equity Fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontained in section 110 to 115BBC. Therefore, merely because the two set of transactions are liable for different rate of tax, it can not be said that income from these transactions does not arise from similar computation made as computation in both the cases has to be made in similar manner under the same provisions. The Tribunal therefore, held that short term capital loss arising from STT paid transactions can be set off against short term capital gain arising from non STT transactions. The case of the assessee is identical. Therefore, respectfully following the decision of the Tribunal, we see no infirmity in the order of CIT(A) and the same is, therefore, upheld . In the result, appeal of the revenue is dismissed . 7. In the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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