COMMISSIONER OF INCOME TAX Vs. MAHENDRA KANAIYALAL HUF

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal has referred the following question to this court under section 256(1) of the Income -tax Act, 1961 :

(2.) IN the assessment proceedings for the assessments year 1974 -75 of Mahendra Kanaiyalal (Hindu undivided family,) A questions arose as to whether the Assessee was entitled to set off short -term capital loss of Rs. 1,790 against other income or whether it was to be set off against capital gains, whether short -term or long -term. The Contention of the assessee was that it was entitled to set off short -term capital loss against other income, i.e., income other than capital gains. The Income -tax Officer rejected this claim. The assessee, however, succeeded in the appeal to the Appellate Assistant Commissioner. Thus, the assessee was held entitled to set off the short -term capital loss against its other income. Long -term capital gain was below Rs. 5,000 and, therefore, was held not taxable. The Revenue, therefore, preferred an appeal before the Tribunal but without any success. Thereupon, the Revenue moved the Tribunal for making a reference to this court under section 256(1) of the Act. That is how the aforesaid question is referred to this court for its opinion.

(3.) IN our opinion, the Tribunal was right in holing as under :