ITAT rules on Short Term Capital Gain and Loss

ITAT rules on Short Term Capital Gain and Loss

The bench dismissed the issue raised by the Income Tax department

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that the Short Term Capital Loss (STCL) on which the Securities Transactions Tax (STT) was paid can be adjusted against the Short Term Capital Gain (STCL) on which STT was not paid.

The assessee, deceased Yogiraj Jaichand Makar had filed his Income Tax Return (ITR) in August 2014 declaring a total income of Rs.83,93,526. He died in January 2016. Thereafter, his son Puneet Yogiraj Makar became his legal heir. Accordingly, the assessment was completed in the name of the legal representative.

For the year under consideration, the deceased assessee had earned an income from rendering professional services as a management consultant and also on capital gains and income from other sources.

The tribunal bench comprising Judicial Member Sandeep Singh Karhail and Accountant Member Prashant Maharishi observed that the provision of the STCL could be set off against the gain from any other capital asset. It said that the IT Act did not make any further classification between the transactions where STT was paid and the transactions where STT was not paid.

It further clarified that the assessing officer (AO) while emphasizing 'similar computation' also referred to the computation as provided under the IT Act.

The bench, thus, ruled, "The DR could not show us any cogent reason to deviate from the aforesaid judicial precedents. We find no infirmity in the impugned order passed by the Commissioner of Income Tax (Appeals) who allowed the STCL (on which STT was paid) against the STCG (on which STT was not paid)."