ADIT (IT) -2(1), MUMBAI V. SEI INVESTYMENTS CANADA COMPANAY EMEGING MARKET EQUITY FUND, MUMBAI

ITA 3150/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1359 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 13-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG
• Keywords: Capital asset; Cost of acquisition; Capital Gains

Judgement Text

ITA NO. 3150/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, (VICE PRESIDENT) AND SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) ITA NO. 3150/MUM/2009 ASSESSMENT YEAR 2005-06 DATE OF HEARING : 7.6.2010 ASSISTANT DIRECTOR OF INCOME TAX 2(1) .. .... APPELLANT R.NO.120, 1 ST FLOOR, SCINDIA HOUSE BALLARD ESTATE, MUMBAI 400 038 VS. M/S. SEI INVESTMENTS CANADA COMPANY .. RE SPONDENT ENGINEERING MARKET EQUITY FUND C/O S.R. BATLIBOI & CO., C.AS, 18 TH FLOOR EXPRESS TOWERS, NARIMAN POINT MUMBAI 400 021 PAN AADTS2443N APPELLANT BY : SHRI ANKUR GARG RESPONDENT BY : SHRI NIRAJ SETH O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF ORDER DATED 10 TH FEBRUARY 2009, PASSED BY THE LEARNED COMMISSIONER (APPEALS)XXXI, MUMBAI, FOR ASSESSMENT YEAR 2005-06. ITA NO. 3150/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 2 OF 10 2. THE GRIEVANCE RAISED BY THE ASSESSING OFFICER, IS A S FOLLOWS:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSES SEE IS ENTITLED TO SET OFF OF SHORT TERM CAPITAL LOSS ON S ALE OF TRANSACTIONS (OF EQUITY SHARES) SUBJECT TO SECURITI ES TRANSACTION (STT) AGAINST SHORT TERM CAPITAL GAIN O N SALE OF TRANSACTION (OF EQUITY SHARES) NOT SUBJECTED TO STT EVEN THOUGH THERE WAS SUFFICIENT SHORT TERM CAPITAL GAIN ON SALE TRANSACTIONS (OF EQUITY SHARES) SUBJECT TO STT, AVA ILABLE FOR SET OFF. 3. BEFORE US, THE LEARNED REPRESENTATIVES FAIRLY AGREE THAT FACTS AND CIRCUMSTANCES OF THE ABOVE ISSUE ARE MUTATIS MUTAND IS SIMILAR TO THOSE DECIDED BY THE MUMBAI SPECIAL BENCHES OF THE TRIBUN AL IN THE CASE OF FIRST STATE INVESTMENTS (HONGKONG) LIMITED VS ADIT (INTER NATIONAL TAXATION), (2009) 33 SOT 26 (SB) (MUM.), WHEREIN, THE SPECIAL BENCH, VIDE ORDER DATED 23 RD JULY 2009, REVERSED THE IMPUGNED ORDER PASSED BY T HE LD. CIT(A) BY OBSERVING AS FOLLOWS:- WE HAVE HEARD THE RIVAL SUBMISSIONS IN THE LIGHT O F MATERIAL PLACED BEFORE US AND PRECEDENTS RELIED UPO N. THERE IS NO DISPUTE ON THE FACT THAT ASSESSEE EARNED SHOR T TERM CAPITAL GAIN UP TO SEPTEMBER 30, 2004, BEING THE CU T-OFF DATE FOR THE APPLICATION OF LOWER TAX RATES ON THE SHORT TERM CAPITAL GAINS WHERE THE TRANSACTION HAS SUFFERED SE CURITIES TRANSACTION TAX, AT RS.36.54 LAKHS AND POST SEPTEM BER 30, 2004 AT RS.472.16 LAKHS THEREBY MAKING THE TOTAL SH ORT TERM CAPITAL GAIN AT RS.508.70 LAKHS. AS AGAINST THIS, THE ASSESSEE SUFFERED SHORT TERM CAPITAL LOSS OF RS.8.1 4 LAKHS UP TO SEPTEMBER 30, 2004 AND RS.169.23 LAKHS IN THE PO ST SEPTEMBER 30, 2004 PERIOD. THERE IS FURTHER NO DI SPUTE THAT THE ASSESSEE IS ENTITLED TO SET OFF THE SHORT TERM CAPITAL LOSS AGAINST THE SHORT TERM CAPITAL GAIN AS THE OVE RALL FIGURE OF NET SHORT TERM CAPITAL GAIN INCLUDIBLE IN THE GR OSS TOTAL INCOME HAS NOT BEEN DISTURBED BY THE ASSESSING OFFI CER. THE ITA NO. 3150/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 3 OF 10 CORE OF THE CONTROVERSY IS THE BIFURCATION OF SUCH SHORT TERM CAPITAL GAIN INTO TWO PERIODS I.E., UP TO SEPTEMBER 30, 2004 IN WHICH TAX IS CHARGEABLE @ 30% AND THE TRANSACTIO NS ARE NOT CHARGEABLE TO SECURITIES TRANSACTIONS TAX AND T HE PERIOD POST SEPTEMBER 30, 2004 IN WHICH CASE REDUCED THE R ATE OF 10% IS APPLICABLE ON SHORT TERM CAPITAL GAIN WHERE THE TRANSACTIONS ARE CHARGEABLE TO SECURITIES TRANSACTI ON TAX. THE CASE OF THE ASSESSEE IS THAT THE SHORT TERM CAP ITAL LOSS IN THE LATER PERIOD BE ALLOWED SET OFF AGAINST THE SHO RT TERM CAPITAL GAIN OF THE FORMER PERIOD TO THE EXTENT OF THE EXCESS OF SHORT TERM CAPITAL GAIN OVER THE SHORT TERM CAPI TAL LOSS UP TO THE CUT OFF DATE I.E., 30-9-2004. ON THE OTH ER HAND THE REVENUE IS CONTENDING THAT ONLY THE SHORT TERM CAPI TAL LOSS SUFFERED BY THE ASSESSEE IN THE PERIOD BEFORE THE C UT OFF DATE SHOULD BE SET OFF AGAINST THE SHORT TERM CAPITAL GA IN OF THAT PERIOD AND THE REMAINING AMOUNT OF RS.28.39 LAKHS (RS.36.54 LAKHS RS.8.14 LAKHS) BE TAXED @ 30%. 8. AT THIS JUNCTURE, IT WILL BE RELEVANT TO CO NSIDER THE LANGUAGE OF SECTION 70, WHICH RUNS AS UNDER : 70 (1) SAVE AS OTHERWISE PROVIDED IN THIS ACT, WHERE THE NET RESULT FOR ANY ASSESSMENT YEAR IN RESPECT OF ANY SOURCE FALLING UNDER ANY HEAD OF INCOME, OTHER THAN CAPITAL GAINS, IS A LOSS, THE ASSESSEE SHALL BE ENTITLED TO HAVE THE AMOUNT OF SUCH LOSS SET OFF AGAINST HIS INCOME FROM ANY OTHER SOURCE UNDER THE SAME HEAD. (2) WHERE THE RESULT OF THE COMPUTATION MADE FOR ANY ASSESSMENT YEAR UNDER SECTIONS 48 TO 55 IN RESPECT OF ANY SHORT TERM CAPITAL ASSET IS A LOSS THE ASSESSEE SHALL BE ENTITLED TO HAVE THE AMOUNT OF SUCH LOSS SET OFF AGAINST THE INCOME, IF ANY, AS ARRIVED AT UNDER A SIMILAR COMPUTATION MADE FOR THE ASSESSMENT YEAR IN RESPECT OF ANY OTHER CAPITAL ASSET. (3) WHERE THE RESULT OF THE COMPUTATION MADE FOR ANY ASSESSMENT YEAR UNDER SECTIONS 48 TO 55 IN RESPECT OF ANY CAPITAL ASSET (OTHER THAN A SHORT TERM CAPITAL ASSET) IS A LOSS, THE ASSESSEE SHALL BE ENTITLED TO HAVE THE AMOUNT OF SUCH LOSS ITA NO. 3150/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 4 OF 10 SET OFF AGAINST THE INCOME, IF ANY, AS ARRIVED AT UNDER A SIMILAR COMPUTATION MADE FOR THE ASSESSMENT YEAR IN RESPECT OF ANY OTHER CAPITAL ASSET NOT BEING A SHORT TERM CAPITAL ASSET. 9. THE SECTION IN THE PRESENT FORM WAS SUBSTITUTED BY THE FINANCE ACT, 2002 WITH EFFECT FROM 1-4-2003. PRIO R TO THE AMENDMENT SECTION 70 READ AS UNDER : S.70. SET OFF OF LOSS FROM ONE SOURCE AGAINST INCOME FROM ANOTHER SOURCE UNDER THE SAME HEAD OF INCOME. SAVE AS OTHERWISE PROVIDED IN THIS ACT, WHERE THE NET RESULT FOR ANY ASSESSMENT YEAR IN RESPECT OF ANY SOURCE FALLING UNDER ANY HEAD OF INCOME IS A LOSS, THE ASSESSEE SHALL BE ENTITLED TO HAVE THE AMOUNT OF SUCH LOSS SET OFF AGAINST HIS INCOME FROM ANY OTHER SOURCE UNDER THE SAME HEAD. 10. ON A COMPARATIVE READING OF BOTH THE SETS OF PROVISIONS, IT CAN BE SEEN THAT WHEREAS THE PRE-SUB STITUTED SECTION 70 PROVIDED FOR THE SETTING OFF LOSS FROM A NY SOURCE AGAINST THE INCOME FROM ANY OTHER SOURCE UNDER THE SAME HEAD, THE NEW SECTION 70 HAS DRAWN A DISTINCTION BE TWEEN THE LOSS UNDER THE HEAD CAPITAL GAINS VIS--VIS THE OTHER HEADS OF INCOME. SUB-SECTION (1) PROVIDES THAT IF THERE IS A LOSS IN RESPECT OF ANY SOURCE FALLING UNDER ANY HEA D OF INCOME, OTHER THAN THE CAPITAL GAIN, THE ASSESSEE SHALL BE ENTITLED TO HAVE SET OFF THE LOSS FROM ONE SOURCE A GAINST ITS INCOME FROM ANY OTHER SOURCE UNDER THE SAME HEAD. I T MEANS THAT IF THE ASSESSEE SUFFERS A LOSS FROM A SO URCE UNDER THE HEAD, SAY, `PROFITS AND GAINS OF BUSINESS OR PR OFESSION, HE SHALL BE ENTITLED TO HAVE SUCH LOSS SET OFF AGAI NST INCOME FROM ANY OTHER SOURCE FALLING UNDER THE SAME HEAD. FOR EXAMPLE, IF THERE IS A LOSS IN BUSINESS ONE AND PRO FIT IN BUSINESS TWO, THE ASSESSEE IS ENTITLED TO SET OFF THE LOSS FROM BUSINESS ONE AGAINST THE PROFIT OF BUSINESS TW O. HOWEVER, A DIFFERENT TREATMENT HAS BEEN PRESCRIBED FOR THE SET OFF OF LOSSES FROM ONE SOURCE AGAINST THE INCOM E FROM OTHER SOURCE(S) UNDER THE HEAD CAPITAL GAINS. SU B-SECTION (2) OF SECTION 70 DEALS WITH THE SET OFF OF ANY S HORT TERM CAPITAL LOSS WITH ANY OTHER CAPITAL GAIN. IT MEANS THE INTER- HEAD SET OFF OF SHORT TERM CAPITAL LOSS IS PERMISSI BLE AGAINST ITA NO. 3150/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 5 OF 10 ANY INCOME UNDER THE HEAD `CAPITAL GAIN. HOWEVER T HE POSITION IS SLIGHTLY DIFFERENT UNDER SUB-SECTION (3 ) WHEN IT COMES TO DEALING WITH THE SET OFF OF LONG TERM CAP ITAL LOSS. THIS PROVISION STATES THAT THE LONG TERM CAPITAL LO SS CAN BE SET OFF ONLY AGAINST THE LONG TERM CAPITAL GAIN AN D NOT THE SHORT TERM CAPITAL GAIN. SO THE OPTION WHICH IS AVA ILABLE TO THE ASSESSEE FOR SETTING OFF THE SHORT TERM CAPITAL LOSS AGAINST THE SHORT TERM CAPITAL GAIN OR LONG TERM CA PITAL GAIN, IS NOT THERE WHEN THERE IS A LONG TERM CAPITA L LOSS, WHICH CAN BE SET OFF ONLY AGAINST THE LONG TERM CAP ITAL GAIN AND NOT AGAINST THE SHORT TERM CAPITAL GAIN. 11. IN THE PRESENT APPEAL, THE CONTROVERSY IS STILL NARROWER INASMUCH AS THE SHORT TERM CAPITAL LOSS WH ICH WAS SET OFF BY THE ASSESSEE AGAINST THE SHORT TERM CAPI TAL GAIN, HAS BEEN ACCEPTED AND THE NET FIGURE OF SHORT TERM CAPITAL GAIN AFTER SET-OFF OF SHORT TERM CAPITAL LOSS CONT INUES TO REMAIN THE SAME. THE DISPUTE IS ONLY ABOUT THE CHO ICE OF SETTING OFF OF SHORT TERM CAPITAL LOSS SUFFERED AFT ER THE CUT- OFF DATE AGAINST THE SHORT TERM CAPITAL GAIN EARNED PRIOR TO THE CUT-OFF DATE. THIS POSITION HAS ARISEN DUE TO T HE INTRODUCTION OF SECTION 111A FOR THE FIRST TIME FRO M THIS YEAR ONLY WHICH PROVIDES FOR LOWER RATE OF TAX ON SHORT TERM CAPITAL GAINS ARISING ON THE TRANSACTIONS WHICH HAV E 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 WIT H THE SHORT TERM CAPITAL GAIN FROM ONE OR MORE TRANSACTIO NS SPREAD OVER THE YEAR, BOTH BEFORE AND AFTER THE CUT OFF DATE. EFFECTIVELY THE QUESTION IS ABOUT THE SETTING OFF OF SHORT TERM CAPITAL LOSS AND SUCH SET-OFF IS GOVERNED BY SUB- SECTION (2) OF SECTION 70, WHICH HAS BEEN REPRODUCE D ABOVE. PRIMARILY THE USE OF WORD ANY TO REPRESENT THE TRANSACTION WHICH RESULTED IN THE SHORT TERM CAPITA L LOSS IS INDICATOR OF THE INITIAL DETERMINATION OF SHORT TER M CAPITAL LOSS OR SHORT TERM CAPITAL GAIN, AS THE CASE MAY BE , FROM EACH TRANSACTION DISTINCTLY. SUPPOSE THE ASSESSEE E NTERED INTO ONE TRANSACTION OF PURCHASE AND SALE OF THE SH ARES OF COMPANY A, WHICH RESULTED INTO SHORT TERM CAPITA L LOSS AND THERE ARE OTHER 9 TRANSACTIONS OF PURCHASE AND SALE OF SHARES WHICH RESULTED INTO SHORT TERM CAPITAL LOSS OR SHORT ITA NO. 3150/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 6 OF 10 TERM CAPITAL GAIN AS THE CASE MAY BE, IT IS MANDATO RY TO DETERMINE SHORT TERM CAPITAL LOSS OR SHORT TERM CAP ITAL GAIN IN RESPECT OF EACH OF THE 10 TRANSACTIONS. THEN THE EMPLOYMENT OF THE EXPRESSION ANY OTHER CAPITAL AS SET IN THE LATER PART OF THE SUB-SECTION FOR THE PURPOSE O F SET OFF CLEARLY INDICATES THAT THE SHORT TERM CAPITAL LOSS FROM ONE TRANSACTION HAS TO BE CONSIDERED DISJOINTEDLY FOR S ET OFF AGAINST THE SHORT TERM CAPITAL GAIN OF ANY OTHER TRANSACTION. FURTHER PRESUME THAT IN THE ABOVE EXAM PLE, ALL 9 OTHER TRANSACTIONS RESULTED INTO PROFIT. NOW THE QUESTION TO BE DECIDED IS AS TO WHO WILL HAVE THE LAST WORD TO DETERMINE THE PREFERENCE OVER THE ORDER OF THE SET OFF OF LOSS FROM THE FIRST TRANSACTION WITH THE SHORT TERM CAP ITAL GAIN IN ANY OR THE OTHER 9 TRANSACTIONS. THE RELEVANT WO RDS USED SOMEWHERE IN BETWEEN SUB-SECTION (2) ARE THAT THE ASSESSEE SHALL BE ENTITLED TO HAVE THE AMOUNT OF S UCH LOSS SET OFF AGAINST THE INCOME IN RESPECT OF ANY OTHER CAPITAL ASSET. PRIMA FACIE THERE IS CUE IN THE LANGUAGE O F THE SUB- SECTION THAT THE OPTION IS WITH THE ASSESSEE AND HE WILL DECIDE AS TO WHETHER THE SHORT TERM CAPITAL LOSS FR OM THE FIRST TRANSACTION OUGHT TO BE SET OFF AGAINST THE S HORT TERM CAPITAL GAIN OF THE TRANSACTIONS NO. 2 OR 3 OR 4 E TC., AS THE CASE MAY BE. OUR VIEW ABOUT THE VESTING OF THE DIS CRETION IN ASSESSEE FOR THE PURPOSES OF SET OFF OF SHORT TERM CAPITAL LOSS AGAINST ANY SHORT TERM CAPITAL GAIN IS FORT IFIED WHEN THE LANGUAGE OF SUB-SECTION (3) OF SECTION 70 IS CO NSIDERED, WHICH SPECIFICALLY PROHIBITS THE SETTING OFF OF LON G TERM CAPITAL LOSS AGAINST SHORT TERM CAPITAL GAIN. IT HA S BEEN PROVIDED IN UNAMBIGUOUS WORDS IN SUB-SECTION (3) TH AT THE LONG TERM CAPITAL LOSS CAN BE SET OFF ONLY AGAINST LONG TERM CAPITAL GAIN AND NOT AGAINST THE SHORT TERM CAPITAL GAIN. IF THE INTENTION OF THE LEGISLATURE HAD BEEN NOT TO CO NFER THE CHOICE ON THE ASSESSEE IN THE MATTER OF SETTING OFF OF THE SHORT TERM CAPITAL LOSS SUFFERED IN THE POST CUT-OF F DATE AGAINST THE SHORT TERM CAPITAL GAIN OF THE PRE-CUT- OFF DATE, IT WOULD HAVE CLEARLY SET OUT SUCH INTENTION IN THE LANGUAGE OF SUB-SECTION (2) ITSELF, AS HAS BEEN DONE IN SUB- SECTION (3). IN THE ABSENCE OF ANY STIPULATION IN THIS REGARD IN SUB- SECTION (2), WE ARE SATISFIED THAT THE CHOICE HAS BEEN LEFT OVER TO THE ASSESSEE IN TAKING DECISION ABOUT THE S ETTING OFF OF SHORT TERM CAPITAL LOSS FROM ONE TRANSACTION AG AINST ANY OTHER SHORT TERM CAPITAL GAIN, WHETHER WITHIN OR O UTSIDE THE CUT-OFF DATE. IF HIGHER BENEFIT POURS IN FROM THE EXERCISE ITA NO. 3150/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 7 OF 10 OF THE OPTION IN A PARTICULAR WAY VIS--VIS THE LOW ER BENEFIT RESULTING IN THE OTHER WAY, THEN THE HIGHER BENEFIT AVAILABLE AS PER LAW SHOULD NOT BE DENIED. THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MONTGOMERY EMERGING MARKET FUND (SUPRA) HAS ALSO RULED IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE SET OFF OF LONG TERM CAPITAL LOSS AGAINST THE SHORT TERM CAPITAL GAIN WAS PERMISSIBLE UNDER SECTION 70, IN THE PERIOD PRIOR TO THE AMENDMENT. ALMOST SIMILAR VI EW WAS TAKEN ALLOWING THE ASSESSEE TO EXERCISE OPTION IN V .R. NIMBAKAR (SUPRA). 12. A LOT OF EMPHASIS HAS BEEN LAID BY THE LEARNED CIT (A) ON THE WORDS UNDER SIMILAR COMPUTATION MADE AS US ED IN SUB-SECTION (2). HE HAS OPINED THAT THERE ARE TWO D IFFERENT CATEGORIES OF THE TRANSACTIONS RESULTING INTO SHORT TERM CAPITAL GAIN VIZ., THOSE TAXABLE IN THE FIRST PERIO D @ 30% AND THOSE TAXABLE IN THE SECOND PERIOD @ 10% 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. SECT IONS 111A AND 115AD FALL IN CHAPTER XII, WHICH PROVIDES FOR DETERMINATION OF TAX IN CERTAIN SPECIAL CASES. THUS IT IS CLEAR THAT ALL THESE SECTIONS FROM 110 TO 115 BC PROVIDE FOR A PARTICULAR RATE OF TAX TO BE APPLIED ON THE INCOMES COVERED UNDER THESE SECTIONS INDIVIDUALLY. HENCE, THESE SEC TIONS DO NOT DEAL WITH THE COMPUTATION OF INCOME BUT ONLY PR OVIDE FOR THE RATE OF TAX APPLICABLE ON THE INCOME. IT IS SIMPLE AND PLAIN THAT THE MATTER OF COMPUTATION OF INCOME IS A SUBJECT WHICH COMES ANTERIOR TO THE APPLICATION OF THE RAT E OF TAX. ONLY WHEN THE INCOME IS COMPUTED AS PER THE PROVISI ONS OF THE ACT, THAT THE QUESTION OF THE APPLICABILITY OF THE CORRECT RATE OF INCOME TAX COMES INTO BEING. INCOME UNDER T HE HEAD `CAPITAL GAINS IS DETERMINED AS PER SECTIONS 45 TO 55A. SECTION 48 WITH THE HEADING MODE OF COMPUTATION P ROVIDES THAT THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS SHALL BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER OF THE CAPITAL ASSET, THE EXPENDITURE INCU RRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRAN SFER AND THE COST OF ACQUISITION OF THE ASSET ALONG WITH THE COST OF ANY IMPROVEMENT, IF ANY. THUS THE COMPUTATION OF C APITAL GAIN, WHICH IS PRESCRIBED UNDER SECTION 48, CANNOT BE CONFUSED WITH THE RATE OF TAX LIABLE TO BE CHARGED ON THE ITA NO. 3150/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 8 OF 10 INCOME UNDER THE HEAD `CAPITAL GAIN SO COMPUTED. W HEREAS, COMPUTATION OF CAPITAL GAIN IS GOVERNED BY SECTION 48, BUT THE RATES OF TAX, IN SO FAR AS WE ARE CONCERNED IN THE PRESENT APPEAL, ARE GOVERNED BY SECTION 111A AND 115 AD. 13. IN VIEW OF THE FOREGOING DISCUSSION WE HOLD TH AT THE AUTHORITIES BELOW ERRED IN NEGATING THE ASSESSE ES COMPUTATION OF SHORT TERM CAPITAL GAIN. WE, THEREFO RE, OVERTURN THE IMPUGNED ORDER AND ALLOW THIS GROUND O F APPEAL. 4. SINCE THE ISSUE BEFORE US IS SQUARELY COVERED BY TH E AFORESAID SPECIAL BENCH DECISION OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND AGAINST THE ASSESSING OFFICER, WE, RESPECTFULLY FOL LOWING THE SAME, DISMISS THE GROUND OF APPEAL RAISED BY THE ASSESSIN G OFFICER. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. PRONO UNCED IN THE OPEN COURT TODAY ON THIS 30 TH DAY OF JUNE 2010. SD/XX SD/XX (D. MANMOHAN) (P RAMOD KUMAR) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI; 30 TH DAY OF JUNE 2010. ITA NO. 3150/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 9 OF 10 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION), MUMBAI 4. COMMISSIONER (APPEALS) , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, E BENCH, ITAT, MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR PRADEEP J. CHOWDHURY INCOME TAX APPELLATE TRIBUNAL SR. PRIVATE SECRETARY MUMBAI BENCHES, MUMBAI ITA NO. 3150/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 10 OF 10 DATE INITIAL 1. DRAFT DICTATED ON 21.6.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 22.6.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 22.6.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 22.6.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 22.6.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 30.6.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 30.6.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER