S. 70(3), S. 111A, S. 115D. As per the provisions of S. 70(3) r.w. S. 111A and S. 115AD, the assessee has an option to set off the short term capital loss against the short term capital gains. Short term capital loss suffered after 1-10-2004 could be set

12. 
    2009 TIOL 547 ITAT Mum.

First State
Investments (Hongkong) Ltd. v. Addl. DIT (International Tax)

ITA No.
2895/Mum./2008

A.Y. : 2005-06.
Dated : 23-7-2009

S. 70(3), S.
111A, S. 115D. As per the provisions of S. 70(3) r.w. S. 111A and S. 115AD,
the assessee has an option to set off the short term capital loss against the
short term capital gains. Short term capital loss suffered after 1-10-2004
could be set off against short term capital gains earned before 30-9-2004.

Facts :

For A.Y. 2005-06,
the assessee computed short term capital gain of Rs.331.33 lakhs. The amount
of short term capital gain and short term capital loss for the period upto
30-9-2004 and after 30-9-2004 was as under :

Particulars	upto 30-9-2004	after 30-9-2004	Total
	Rupees in lakhs
Short term capital gain	36.54	472.16	508.70
Short term capital loss	8.14	169.23	177.37
Total	28.40	302.93	331.33

The assessee sought
to set off the short term capital loss suffered in the period after 30-9-2004
against short term capital gain for a period before 30-9-2004 and contended
that the short term capital gain upto 30-9-2004 was Rs.Nil and that the entire
short term capital gain was for a period after 30-9-2004 and therefore was
taxable @ 10%.

According to the
Assessing Officer, the assessee could not set off the short term capital loss
for a period after 30-9-2004 with the short term capital gain arising in a
period prior to 1-10-2004 since in the period prior to 1-10-2004 short term
capital gain was chargeable at normal rates whereas in the period after
30-9-2004 short term capital gain on which STT was paid was chargeable at
concessional rate of 10%. He, held that Rs.28.40 lakhs is capital gain for the
period upto 30-9-2004 and Rs.302.93 lakhs is capital gain arising during the
period after 30-9-2004.

Aggrieved, the
assessee preferred an appeal to the CIT(A) who upheld the action of the AO.