ACIT, New Delhi V. M/s Utkal Investments Ltd., New Delhi

ITA 917/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97168 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 03-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 14-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEKAR
• Assessee Lawyers: M L DUJARI
• Keywords: Capital asset; Business income; Earning of tax free income; Speculation loss
• Section: 143(3)

Judgement Text

1 ITA NO. 91 7/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH:H NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER & SMT. BEENA PILLAI, JUDICIAL MEMBER I.T.A .NO. 917/DEL /2013 (ASSESSMENT YEAR-2006- 07) ACIT, CIRCLE 18(1), NEW DELHI. VS UTKAL INVESTMENTS LTD., B-47, SHIV PLACE, CONNAUGHT PLACE, NEW DELHI. AAACU1603L APPELLANT BY SH. VIVEK WADEKAR, CIT DR RESPONDENT BY SH. M.L, DUJARI, CA ORDER PER BEENA PILLAI, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)S-XXI, NEW DELHI DATED 07.11.2012 FOR A.Y. 2006-07 ON THE FOLLOWING GROUNDS: 1. LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CA SE IN DIRECTING THE AO NOT TO REDUCE THE LONG TERM CAPITA L GAIN FROM THE INCOME EXEMPT U/S 10(38) OF THE I.T. ACT A ND TO ALLOW CARRY FORWARD OF THE LONG TERM CAPITAL GAIN. DATE OF HEARING 03.09.2015 DATE OF PRONOUNCEMENT 04.09.2015 2 ITA NO. 91 7/DEL/2013 2. THE APPELLANT CRAVES, LEAVE OR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD, OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS IN THE BUSINESS OF CARRYING ON THE ACTIVITY OF INVESTMENTS AND TO INVE ST IN AND ACQUIRE SHARES, HOLD SHARES, STOCKS AND DEBENTURES, STICK B ONDS AND SECURITIES AND TO CARRY ON THE BUSINESS OF FINANCER S AND ADVANCING LOANS. 3. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARIN G RS.1,33,77,935/-. THE CASE WAS SELECTED FOR SCRUTIN Y AND NOTICE U/S.143(2) WAS ISSUED. THE ASSESSING OFFICER COMPLE TED ASSESSMENT BY TREATING CAPITAL GAINS AS BUSINESS INCOME. AGGR IEVED BY THE ASSESSMENT ORDER, THE ASSESSEE WENT INTO APPEAL BEF ORE THE LD. CIT(A). LD. CIT(APPEALS) VIDE ORDER DATED 28 TH FEBRUARY, 2011 IN APPEAL NO. 243/2008-09, HELD THAT EXCEPT SHORT TERM CAPITAL GAINS OF RS. 19,30,207/- REMAINING CAPITAL GAINS ARE TO B E ASSESSED AS CAPITAL GAINS AND NOT AS BUSINESS INCOME WITH CERTA IN DIRECTIONS. 4. THE LD. A.O WHILE GIVING EFFECT TO THE ORDER OF THE ORDER PASSED BY THE LD. CIT(A), DID NOT ALLOW THE SET OFF OF LON G TERM CAPITAL LOSS AND CONSEQUENTLY DID NOT ALLOW THE CARRY FORWARD OF THE SAID LOSS. THE LD. A.O FURTHER SET OFF THE LONG TERM CAPITAL L OSS AGAINST THE INCOME NOT FORMING PART OF THE TOTAL INCOME. 5. THE LD. CIT(A) VIDE HIS ORDER DATED 07.11.2012, ALLOWED THE CARRY FORWARD OF LOSS TO THE APPELLANT INSTEAD OF S ETTING IT OFF AGAINST THE EXEMPT INCOME U/S.10(38) OF THE ACT. 6. AGGRIEVED BY THIS ORDER OF THE LD. CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 3 ITA NO. 91 7/DEL/2013 7. THE LD. DR IN HIS ARGUMENTS SUPPORTS THE ORDER P ASSED BY THE LD. A.O. 8. WE HAVE HEARD THE CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US AND THE ORDERS PASSED BY THE AUTHORITIES BELOW. 9. WE HAVE PERUSED THE ORDER DATED 28 TH FEBRUARY, 2011 OF THE LD.CIT (A) IN APPEAL NO. 243/2008-09 AGAINST THE AS SESSMENT ORDER (PAGES 20-40 OF THE PAPER BOOK) . IT HAS BEEN RECORDED BY THE LD.CIT(A) THEREIN THAT THE ACTIVITIES OF THE ASSESS EE AS MENTIONED ABOVE ARE DULY AUTHORIZED BY THE MEMORANDUM AND ASS OCIATION AND ARTICLES OF ASSOCIATION FOLLOWED BY THE BOARD RESOL UTIONS PASSED BY THE BOARD OF DIRECTORS. 10. IT HAS BEEN OBSERVED BY US FROM THE RECORDS TH AT THE LD. CIT(A) IN THE APPELLATE PROCEEDINGS AGAINST THE ASSESSMENT ORDER, HAD FORWARDED THE WRITTEN SUBMISSIONS FILED BY THE ASSE SSEE TO LD. A.O FOR REMAND REPORT. THE LD. A.O SUBMITTED THE REMAND REPORT ON 23.03.2010WHERIN HE HAS VIRTUALLY RELIED UPON THE C ONTENTIONS RAISED IN THE ASSESSMENT ORDER AND NOTHING NEW HAS BEEN SAID OR BROUGHT ON RECORD. 11. ON PERUSAL OF THE ORDER DATED 28.02.2011, PASS ED BY LD.CIT(A), WE FIND THAT HE HAS RECORDED THE FOLLOWI NG FINDINGS; A) AT THE CLOSE OF THE PREVIOUS YEAR RELEVANT TO ASSE SSMENT YEAR 2005-06 THE APPELLANT HELD VARIOUS SHARES AND SECURITIES IN ITS INVESTMENT PORTFOLIO WHICH WERE V ALUED AT COST SUBJECT TO PROVISION FOR DIMINUTION IN THEIR V ALUE. IT ALSO HELD SHARES IN STOCK IN RESPECT OF WHICH IT IN DULGED INTO TRADING WHICH WERE VALUED AT COST OR MARKET PR ICE 4 ITA NO. 91 7/DEL/2013 WHICHEVER IS LOWER. THE APPELLANT IS REGULARLY AND CONSISTENTLY CARRYING OUT THESE ACTIVITIES AND HAD BEEN VALUING ITS INVESTMENT AND INVENTORY IN THE LIKE MANNER. IN ITS BALANCE SHEETS FROM YEAR TO YEAR AND TAX AUD IT REPORTS QUANTITATIVE INFORMATION IN RESPECT OF THE SHARES TRADED HAS BEEN GIVEN. ASSESSMENTS FOR ASSESSMENT YEARS 2001-02, 2003-04, 2004-05 AND 2005-06 HAVE BEEN MADE U/S 143(3) OF THE INCOME TAX ACT, 1961 AN D CONSISTENTLY THIS POSITION HAS BEEN ACCEPTED BY THE INCOME TAX DEPARTMENT. B) IN THE YEAR UNDER CONSIDERATION THE ASSESSEE FILED ITS RETURN OF INCOME IN WHICH IT FINALLY RETURNED ITS I NCOME AS UNDER: I. BUSINESS LOSS RS. 2,58,36,171/- II. SPECULATIVE PROFIT SET OFF FROM RS. 14,92,509 UNABSORBED BROUGHT FORWARD LOSS RS. 14,92,509 RS. NIL III. LONG TERM CAPITAL LOSS SOUGHT TO BE CARRIED OVER RS. 64,75,320/- IV. LONG TERM CAPITAL GAIN CLAIMED EXEMPT U/S 10(38) OF THE IT ACT, 1961 RS. 36,69,41,543/- V. SHORT TERM CAPITAL GAIN TAXABLE AT NORMAL RATE RS . 1,02,62,977/- VI. SHORT TERM CAPITAL GAIN TAXABLE U/S 111A RS. 2 ,90,61,626/- APPELLANT ALSO DECLARED DIVIDEND INCOME EXEMPT U/S 10(34)/35 RS. 3,51,49,900/- IN THE COMPUTATION OF INCOME BROUGHT FORWARD UNABSORBED LOSSES WERE ALSO DECLARED AS UNDER: I) BUSINESS LOSSES RS. 64,14,925/- II) SPECULATIVE LOSSES RS. 47,51,109 /- INTEREST INCOME RECEIVED FROM THE ACTIVITY OF ADVAN CING LOANS AMOUNTING TO RS. 18,47,672/- WAS RETURNED AS INCOME FROM BUSINESS AS IN THE PAST. 5 ITA NO. 91 7/DEL/2013 C) THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT TREATED CAPITAL GAINS AS BUSINESS INCOME FOR THE RE ASONS STATED BY HIM IN THE ASSESSMENT ORDER BRUSHING ASID E DETAILED SUBMISSIONS MADE BY THE ASSESSEE COMPANY A ND REPRODUCED IN THE ASSESSMENT ORDER. ALTERNATELY HE TREATED THE ENTIRE INCOME AS SPECULATIVE WITHIN THE MEANING OF EXPLANATION TO SEC. 73. D) AT NO POINT OF TIME THE AO REQUIRED THE ASSESSEE TO RECONCILE AND EXPLAIN THE DISCREPANCIES BETWEEN TOT AL TURNOVER OF STOCKS TRADED AND THE FIGURES EMANATING FROM RESPONSE TO QUERIES. E) THE ASSESSEE HAS ALSO SUBMITTED TO THE AO DETAILS O F SHORT TERM CAPITAL GAINS ON WHICH TAX IS CHARGEABLE U/S 111A OF THE INCOME TAX ACT, 1961. FROM THESE DETAI LS IT IS ABUNDANTLY CLEAR THAT MANY ITEMS OF REALIZATION OF SHARES AND SECURITIES ARE OUT OF THE SHARES AND SEC URITIES HELD AS INVESTMENT ON 31 ST MARCH, 2005. F) IT WAS ACCORDINGLY EMPHASIZED THAT THE ASSESSEE COMPANY IS HAVING TWO PORTFOLIOS, I.E., INVESTMENT PORTFOLIO COMPRISING OF SECURITIES WHICH ARE TREATE D AS CAPITAL ASSETS AND TRADING PORTFOLIO COMPRISING OF STOCK IN TRADE WHICH IS TREATED AS TRADING ASSETS. INCOM E DERIVED BY THE ASSESSEE COMPANY ON REALIZATION OF I TS INVESTMENT PORTFOLIO IS CAPITAL GAIN AND HAS BEEN DECLARED AS SUCH. INCOME DERIVED FROM THE STOCK IN TRADE HAS BEEN DECLARED AS BUSINESS INCOME. ASSESSEE IS 6 ITA NO. 91 7/DEL/2013 ENTITLED TO MAINTAIN BOTH THE PORTFOLIOS, AND IT HA S BEEN MAINTAINING THEM CONSISTENTLY FROM YEAR TO YEAR. G) LD. CIT(A) PLACED RELIANCE ON THE JUDGMENT OF HONB LE DELHI HIGH COURT IN THE CASE OF CIT VS. ROHIT ANAND REPORTED AT 327 ITR PAGE 445. THE HONBLE DELHI HI GH COURT HAS HELD AS UNDER: THERE IS NO DOUBT THAT EVEN A SINGLE TRANSACTION C AN BE IN THE NATURE OF TRADE BUT THE ASSESSEE HAS DEMONSTRATED THAT HIS INTENTION WAS NEVER TO TRADE IN SHARES. THE INTENTION IS MANIFESTED BY TREATMENT GIVEN TO SUCH INVESTMENT THAT THE INVESTMENT IS OUT OF OWN FUND AND NOT BORROWED THAT THE INVESTMENT IS NO T ROTATED FREQUENTLY, THAT THE TOTAL NUMBER OF TRANSACTIONS ARE VERY FEW, THAT ALL THE SHARES PURCHASED ARE NOT SOLD AND RATHER HELD FOR QUITE NUMBER OF DAYS. IT IS TO BE NOTED THE INCOME TAX A CT ITSELF HAS PROVIDED THAT WHEN THE SHARES ARE HELD F OR A PERIOD OF ONE YEAR OR MORE WILL BE TREATED AS LONG TERM CAPITAL ASSET CONTRARY TO OTHER ASSETS WHERE THE HOLDING PERIOD TO TREAT SUCH ASSET A LONG TERM IS M ORE THAN 36 MONTHS. THUS, EVEN AFTER HOLDING THE SHARE S FOR MORE THAN 12 MONTHS AND SHOWING SUCH INTENTION FROM THE CONDUCT, THE AO CANNOT REPLACE HIS OPINION FOR THAT OF THE ASSESSEE IN HOLDING THAT THE SHARES ARE HELD AS STOCK IN TRADE AND PROFIT FROM WHICH IS TO BE ASSESSED AS BUSINESS INCOME. IN ALL SUCH CASES THE INTENTION IS MANIFESTED BY THE ASSESSEE HIMSELF BY HIS CONDUCT AND OTHER RELEVANT FACTORS AS CONSIDERED BY THE LD. CIT(APPEALS). IT IS ALSO SEEN THAT THE SHA RES WERE TREATED AS INVESTMENT IN EARLIER YEAR AND WHIC H FACT HAS BEEN ACCEPTED BY THE AO. THE ASSESSEE HAS ALSO EARNED HUGE DIVIDEND INCOME FROM SUCH SHARES. THE AO MERELY BECAUSE OF THE TOTAL VOLUME OF TRANSACTION IS SUBSTANTIAL, IS GUIDED TO HOLD THE I NCOME AS BUSINESS INCOME. HOWEVER, HE FAILED TO RECOGNIZ E THAT THE VOLUME OF TRANSACTION INCLUDES THE 7 ITA NO. 91 7/DEL/2013 APPRECIATION IN SHARES ALSO AND SUCH APPRECIATION H AS BEEN OFFERED FOR TAX. IF VOLUME OF TRANSACTION IS THE CRITERIA, WHAT IS TO BE EXAMINED IS HOW FREQUENTLY THE TRANSACTION IS DONE, WHETHER THE TRANSACTION IS SET TLED IN THE COURSE OF THE DAY OF TRADING ITSELF OR IN TH E SETTLEMENT PERIOD ITSELF SO AS TO AVOID PAYMENT OF FULL PURCHASE PRICE. HERE THE ASSESSEE HAS BEEN HOLDING THE SHARES BY TAKING DELIVERY AND MAKING FULL PAYMENT FOR SUCH INVESTMENT. IN SUCH CIRCUMSTANCES , THE TRANSACTIONS ARE TO BE TREATED AS GIVING RISE T O THE CAPITAL GAIN AND CANNOT BE BRANDED AS TRADING OF MAKING INVESTMENT SO AS TO DETERMINE WHETHER THE TRANSACTION WAS FOR DEALING IN SHARES OR MAKING INVESTMENT FOR EARNING DIVIDEND AND APPRECIATION FR OM SUCH INVESTMENT. H) THE LD. CIT(A) DECIDED THE ISSUE AS UNDER: CONSIDERING THE TOTALITY AND PECULIARITY OF THE FA CTS OF THIS CASE, WE FIND THAT ASSESSEE IS NEITHER FULL Y ACTING AS A TRADER NOR AS FULLY INVESTOR. DEMARCAT ION IS QUITE HAZY; THOUGH IN THE BOOKS HE IS SHOWING AL L THE PURCHASES AS INVESTMENT BUT FREQUENCY OF TRANSACTION IN SEVERAL CASES IS SO LARGE AND HOLDIN G PERIOD IN MANY CASES IS SO SMALL FROM 0 TO A WEEK OR SO THAT ASSESSEE IS DE FACTO SELLING AND PURCHAS ING SHARES AS TRADER. HE IS ALSO HOLDING SHARES FOR LO NG PERIOD INDICATING THAT THEY ARE HELD AS INVESTMEN T. THEREFORE, A CRITERIA HAS TO BE FIXED FOR DETERMINI NG AS TO WHEN HE IS ACTING AS TRADER AND WHEN AS INVESTOR . ACCORDINGLY, WE DECIDE FOLLOWING CRITERIA TO HOLD W HEN GAINS ARE TO BE TAXED AS PROFIT TO BE EARNED UNDER THE BUSINESS OR TO BE TAXED AS SHORT TERM CAPITAL GAIN, WE 8 ITA NO. 91 7/DEL/2013 HOLD THAT IF SHARES ARE NOT HELD EVEN SAY FOR A MON TH, THEN THE INTENTION IS CLEARLY TO REAP PROFIT BY ACT ING AS A TRADER AND HE DID NOT INTEND TO HOLD THEM IN INVESTMENT PORTFOLIO. WE BELIEVE THAT IF A PERSON INTENDS TO HOLD HIS PURCHASES OF SHARES AS INVESTMENT, HE WOULD WATCH THE FLUCTUATION OF RATES IN THE MARKET FOR WHICH A MINIMUM TIME IS NECESSARY, WHICH WE ESTIMATE AT ONE MONTH. WHERE SHARES ARE HELD FOR MORE THAN A MONTH, THEY SHOULD BE TREATED AS INVESTMENT AND ON THEIR SALE SHORT TE RM CAPITAL GAIN SHOULD BE CHARGED. WHEN SHARES ARE HELD FOR LESS THAN A MONTH, GAIN ON THEM SHOULD BE TREATED AS PROFIT FROM BUSINESS. I) AFTER ANALYZING THE ISSUE AND CONSIDERING THE VARIO US CASE LAWS AS RELIED UPON BY THE LD. AR, THE LD. CIT (A) FOUND THAT, HOLDING PERIOD IS THE MOST APPROPRIATE FACTOR TO DECIDE THE ISSUE, WHETHER IT SHOULD BE TREATED AS STOCK IN TRADE TREATING IT AS A BUSINESS INCOME OR INVESTMENT SO AS TO TREAT IT AS CAPITAL GAIN. J) IN VIEW OF THE ABOVE DISCUSSION THE BIFURCATION OF THE SHARES HELD FOR LESS 30 DAYS ON THE BASIS OF WORKING GIVEN BY MANAGING DIRECTOR OF ASSESSEE COMPANY VIDE LETTER DATED 6.12.2010. PARTICULARS AMOUNT SHORT TERM CAPITAL GAIN @ 30% 10,96,774/- SHORT TERM CAPITAL GAIN @ 10% 9 ITA NO. 91 7/DEL/2013 OWN SHARES (BONUS SHARES AND/OR RIGHT ISSUE SHARES) 21,53,221/- OWN SHARES (OTHERS) 3,34,881/- PMS SHARES LOSS 16,54,669 /- TOTAL GAIN 19,30,207/- 12. THUS, THE LD. CIT(A) DIRECTED THE LD.A.O TO CON SIDER THE GAIN ON SHARES HELD UP TO 30 DAYS COMES TO RS. 19,30,207/-, WHICH WILL BE TREATED AS BUSINESS INCOME AND ALL THE OTHER GAIN S WHICH HAS BEEN HELD BY THE AO IN THE ASSESSMENT ORDER AS BUSINESS INCOME, IS TO BE ALLOWED AS CAPITAL GAIN, WHETHER LONG TERM OR SH ORT TERM. THE LD.A.O WAS ALSO DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE WITH REGARD TO HOLDING PERIOD LESS THAN 30 DAYS AND GAIN OUT OF IT, AFTER PROPER VERIFICATION AND TO ALLOW THE CLAIM OF APPEL LANT. 13. IT HAS BEEN RECORDED BY THE LD. CIT(A) THAT THE ACCOUNTS OF THE COMPANY ARE PREPARED IN ACCORDANCE WITH SCHEDULE VI OF THE COMPANIES ACT, 1956 WHICH DO NOT REQUIRE PREPARATIO N OF A SEPARATE TRADING ACCOUNT. 14. THE LD. CIT(A) HAD PASSED THE ORDER WITH SPECIF IC DIRECTIONS AND TO ALLOW THE SET OFF IN ACCORDANCE WITH THE PROVISI ONS OF SEC.74 OF THE ACT. HOWEVER THE LD. A.O FAILED TO COMPLY WITH THE DIRECTION INTO AND HAS WORKED OUT THE COMPUTATION WITHOUT APPLICATION OF LAW. SECTION 74 OF THE INCOME TAX ACT, 1961, WHICH READ AS UNDER: 74. (1) WHERE IN RESPECT OF ANY ASSESSMENT YEAR, THE NET RESULT OF THE COMPUTATION UNDER THE HEAD CAPITAL G AINS IS A LOSS TO THE ASSESSEE, THE WHOLE LOSS SHALL, SUBJE CT TO THE OTHER PROVISIONS OF THIS CHAPTER, BE CARRIED FORWAR D TO THE FOLLOWING ASSESSMENT YEAR, AND- A) IN SO FAR AS SUCH LOSS RELATES TO A SHORT TERM CA PITAL ASSET, IT SHALL BE SET OFF AGAINST INCOME, IF ANY, UNDER 10 ITA NO. 9 17/DEL/2013 THE HEAD CAPITAL GAINS ASSESSABLE FOR THAT ASSESSMENT YEAR IN RESPECT OF ANY OTHER CAPITAL ASS ET; B) IN SO FAR AS SUCH LOSS RELATES TO A LONG TERM CAPIT AL ASSET, IT SHALL BE SET OFF AGAINST INCOME, IF ANY, UNDER THE HEAD CAPITAL GAINS ASSESSABLE FOR THAT ASSESSMENT YEAR IN RESPECT OF ANY OTHER CAPITAL ASS ET NOT BEING A SHORT TERM CAPITAL ASSET; C) IF THE LOSS CANNOT BE WHOLLY SO SET OFF, THE AMOUNT OF LOSS NOT SO SET OFF SHALL BE CARRIED FORWARD TO THE FOLLOWING ASSESSMENT YEAR AND SO ON (2) NO LOSS SHALL BE CARRIED FORWARD UNDER THIS SE CTION FOR MORE THAN EIGHT ASSESSMENT YEARS IMMEDIATELY SUCCEEDING THE ASSESSMENT YEAR FOR WHICH THE LOSS W AS FIRST COMPUTED. 15. CLAUSE (B) OF SUB SECTION (1) OF THIS SECTION P ROVIDE THAT IN SO FAR AS CAPITAL LOSS RELATE TO CAPITAL ASSET, IT SHA LL BE SET OFF AGAINST INCOME, IF ANY, UNDER THE HEAD CAPITAL GAINS ASSE SSABLE FOR THAT ASSESSMENT YEAR IN RESPECT OF ANY OTHER CAPITAL ASS ET NOT BEING A SHORT TERM CAPITAL ASSET AND ARISING IN THE FOLLOWI NG ASSESSMENT YEAR. 16. LAW MAKES IT AMPLY CLEAR THAT LONG TERM CAPITAL LOSS CAN BE SET OFF ONLY AGAINST ASSESSABLE CAPITAL GAINS AND NOT O THERWISE. HOWEVER, WHILE GIVING EFFECT TO THE ORDER OF THE LD . CIT(A) ON 21 ST MARCH, 2011 (PAGES 1TO 3 OF THE PAPER BOOK) LD. AO SET OFF THE LOSS FROM THE LONG TERM CAPITAL GAIN, NOT ASSESSABLE TO TAX DURING THE YEAR UNDER CONSIDERATION. IN VIEW OF SPECIFIC PROVI SIONS OF SECTION 74 AS NOTED HEREINABOVE LD.A.O WAS NOT ENTITLED TO RED UCE THE LOSS, FROM THE INCOME EXEMPT U/S 10(38) OF THE INCOME TAX ACT, 1961 17. WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSE D BY THE LD. CIT(A) IN ALLOWING THE CARRY FORWARD OF LOSS IN VIE W OF THE DISCUSSION ABOVE. 11 ITA NO. 9 17/DEL/2013 18. THE GROUND OF THE REVENUE IS DISMISSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 04/09/2015 SD/- SD/- (N.K. SAINI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04.09.2015 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 12 ITA NO. 9 17/DEL/2013 DATE 1. DRAFT DICTATED ON 03.09.2015 2. DRAFT PLACED BEFORE AUTHOR 04.09.2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 04.09.2015 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 04.09.2015 5. APPROVED DRAFT COMES TO THE SR.PS/PS 04.09.2015 6. KEPT FOR PRONOUNCEMENT ON 04.09.2015 7. FILE SENT TO THE BENCH CLERK 07.09.2015 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.