BALASUBRAHMANYAN J. - In this case, the assessee claimed relief under s. 80T of the I.T. Act, 1961. This section grants relief to an assessee, other than a company, where the gross total income includes 'any income chargeable under the head Capital gains relating to capital assets other than short-term capital assets'. In the present case, the assessee has two long-term capital assets, to with, equity shares in certain companies and vacant sites. On the sale of shares the assessee incurred a loss of Rs. 96,907. On the sale of house sites, however, the assessee obtained a capital gain of Rs. 48,767. The net result, however, was a loss of Rs. 46,140. Notwithstanding that the result of the computation of the transaction in long-term capital assets during the account year was a loss of Rs. 48,140, the assessee claimed relief under s. 80T on the score that the relief had to be worked out on the capital gains on the sale of the items of immovable properly in the sum of Rs. 48,767. The ITO rejected this claim. The Tribunal, however, eventually allowed the appeal for the assessee holding that type assessee was entitled to the relief under s. 80T and that the relief has got to be worked out on the basis of Rs. 48,767, being whether the Tribunals diction is correct.
A reading of s. 80T will clearly show that the relief is exigible not on individualised items of long-term capital gains, but. On the contrary, it is one 'income chargeable under the head Capital gains relating to capital assets other than short-term capital assets'. Under the scheme of the I.T. Act, there are different heads of income, such as, income from property, profits and gains of business, income-from securities, capital gains, and so on. For certain purpose, chiefly for set-off of loss under the head 'Capital gains', capital gains itself is bifurcated into two sub-heads-long-term capital gains and short-term capital gains. The income, which is chargeable under the sub-head 'Long-term capital gains' would really include the sum total of the long-term capital gains', one will have to set off the long-term capital gains on the sale of real property was only Rs. 48,767; the net result of the compassion is laid done by s. 70(2)(ii) of the Act. In the present case, the long-term capital loose on the sale of shares was Rs. 96,907, whereas the long-term capital loss on the sale of shares was Rs. 96,907, whereas the long-term capital gains on the sale of real property was only Rs. 48,767, the net result of the computation under the sub-head 'Long-term capital gains' was a loss of Rs. 48,140. Since this net result was a loss, there can be no question of any relief under s. 80T of the Act, for the simple reason that it contemplates a positive income chargeable under the head 'Long-term capital gains. 'The Tribunals decision has wholly ignored not only the scheme of computation of the long-term capital gains under the appropriate sub-head inclusive of the provisions as to set off of long-term capital losses but also the relief provided under s. 80T.
The question of law which has been referred to us by the Tribunal in this case is as follows:
'Whether, on the facts and in the circumstances of the case, deduction under section 80T was to be allowed on the capital gains of Rs. 48,767 arising from the sale of the Bungler property and the balance was to be set off against the capital loss of Rs. 96,907 arising from the sale of shares in the computation of the income of the assessee for the assessment year 1973-74 ?'
Having regard to the consideration we have stated above, our answer to this question is against the assessee and in favour of the Department. The Department will have its costs from the assessee. Counsels fee Rs. 500.