COMMISSIONER OF INCOME TAX-III vs. ANG SECURITIES LTD.

ITA No. 67 of 2012 (O&M) -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No. 67 of 2012 (O&M) Date of decision: 23.04.2013 The Commissioner of Income Tax-III Ludhiana ...Appellant versus ANG Securities Ltd.,Ludhiana ...Respondent CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MS. JUSTICE RITU BAHRI Present:- Mr. Rajesh Katoch, Advocate for the appellant *** HEMANT GUPTA, J. (Oral) The present appeal under Section 260A of the Income Tax Act, 1961 (for short 'the Act') is directed against the order dated 30.11.2010 passed by the Income Tax Appellate Tribunal, Chandigarh (for short 'the Tribunal') relating to the assessment year 2005-06. After hearing learned counsel for the appellant, we find that the following substantial question of law arises for consideration by this Court. “Whether on the facts and in the circumstances of the case, the loss on account of sale of shares can be set off against income from sale of shares exempted not forming part of income under Section 10(38) of the Income Tax Act, 1961.” The assessee during the relevant assessment year has disclosed the income from Long Term Capital Gain amounting to Rs.6,17,14,300/-. The Assessing Officer was of the view that the brought forward loss accruing from sales of shares totaling to Rs.1,79,71,926/- were required to be adjusted out of the income earned from profit from sale of shares during the year in question.

ITA No. 67 of 2012 (O&M) -2- The Commissioner of Income Tax(Appeals)-II Ludhiana vide order dated 09.08.2010 (A-2) accepted the order of the Assessing Officer but the learned Tribunal allowed the appeal of the assessee by relying upon an order passed by Mumbai Bench of the Tribunal in G.K. Ramamutry vs. JCIT [(2010) 2 ITR (Trib) 0139 wherein it has been held that the loss from sale of shares cannot be set off against the gain forming part of exemption in terms of Section 10(38) of the Act. We have heard learned counsel for the appellant and find that Section 10 falling under Chapter III of the Act contemplates the income which are not included in the expression 'total income'. Sub Clause 38 of Section 10 of the Act contemplates that any income arises from the transfer of Long Term Capital Assets is not an income. Therefore, the income from the sale of shares of the relevant year is not an income, which can be set off from the loss from sale of shares earned in the previous year. In view of the said fact, we find that the order of the Tribunal does not warrant any interference by this Court. The appeal is accordingly dismissed. (HEMANT GUPTA) JUDGE ( RITU BAHRI ) JUDGE April 23, 2013 G.Arora