The Commissioner Of Income Tax-Iii Ludhiana v. Ang Securities Ltd.,Ludhiana

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 GUPTAHON'BLE MS. JUSTICE RITU BAHRI Present:- Mr. Rajesh Katoch, Advocatefor 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 30.11.2010passed by the Income Tax Appellate Tribunal, Chandigarh (for short 'theTribunal') relating to the assessment year 2005-06. After hearing learned counsel for the appellant, we find that thefollowing substantial question of law arises for consideration by this Court. “Whether on the facts and in the circumstances of the case, theloss on account of sale of shares can be set off against income from saleof shares exempted not forming part of income under Section 10(38) ofthe 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 lossaccruing from sales of shares totaling to Rs.1,79,71,926/- were required tobe adjusted out of the income earned from profit from sale of sharesduring the year in question. The Commissioner of Income Tax(Appeals)-II Ludhiana videorder dated 09.08.2010 (A-2) accepted the order of the Assessing Officerbut the learned Tribunal allowed the appeal of the assessee by relyingupon an order passed by Mumbai Bench of the Tribunal in G.K.Ramamutry vs. JCIT [(2010) 2 ITR (Trib) 0139 wherein it has beenheld that the loss from sale of shares cannot be set off against the gainforming part of exemption in terms of Section 10(38) of the Act. We have heard learned counsel for the appellant and find thatSection 10 falling under Chapter III of the Act contemplates the incomewhich are not included in the expression 'total income'. Sub Clause 38 ofSection 10 of the Act contemplates that any income arises from thetransfer of Long Term Capital Assets is not an income. Therefore, theincome 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 theprevious year. In view of the said fact, we find that the order of the Tribunaldoes not warrant any interference by this Court. The appeal is accordingly dismissed. (HEMANT GUPTA) JUDGE ( RITU BAHRI ) JUDGE