C K MEHTA Vs. FIRST INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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B.B. Palekar, President -
(1.) THE assessee, who has income from salary, dividends, etc., sold in the year under consideration gold and shares of two companies held by him. It is common ground that all these assets are not short-term assets. THEre is no dispute also about the full value of the consideration received by the assessee in this case and the amount deductible as the cost of acquisition. THE difference between the consideration and the cost was as below:
THEre is no dispute that the assessee is entitled to the deduction of Rs. 5,000 allowable under section SOT. THE dispute is about the amount of deduction further allowable at 40 per cent of the long-term capital gain.
(2.) According to the assessee, the amount of deduction is to be worked out at 40 per cent of each of the amounts of long-term capital gain arising from the sale of gold and the shares of Deepak Nitrate Ltd., respectively, but before setting off the loss from the sale of the shares of the Sodium Metal (P.) Ltd.
The assessee worked out the deduction in the sum of Rs. 1,60,890 as below :
According to the department, the deduction is allowable at 40 per cent of the amount arrived at after setting off the loss from the sale of the shares of Sodium Metal (P.) Ltd. against the total amount of the capital gain. The ITO determined accordingly the deduction allowable at Rs. 96,890 as below :
The Commissioner (Appeals) having upheld the view of the TTO, the assessee has filed the appeal now under consideration.
(3.) THE Commissioner (Appeals), in his order, has not specifically dealt with the arguments which had been advanced before him on behalf of the assessee. He has felt that it was not necessary to do so because the learned representative of the assessee, who appeared before him, had not disputed that there was only one decision of the High Court on the point at issue, that the said decision was in favour of the revenue and the said learned representative of the assessee had not supplied the Commissioner (Appeals) with a copy of the said decision. THE Commissioner (Appeals) has not indicated the identity of the relevant decision.
From the grounds of appeal, it would appear that the decision in question was the decision of the Kerala High Court in the case of H.H. Sir Rama Varma, which has since been reported at  129 ITR 156.
However, his assumption that there was no other decision available at the relevant time is not quite correct. For example, there were decisions of the Madras High Court in the cases of CIT v. V. Venkatachalam  J20 ITR 688 and Addl. CIT v. K.AL. KR. Ramaswami Chettiar  120 ITR 694 which had been reported in 1979 and the ratio of these decisions is against the revenue.;
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