| Case ID |
1aec2b51-dea6-4571-8d63-66b79ea00683 |
| Body |
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| Case Number |
Civil Appeal No.4851 of 1990 |
| Decision Date |
Apr 28, 1993 |
| Hearing Date |
|
| Decision |
The Supreme Court affirmed the decision of the Madras High Court, stating that the deductions under section 80-T of the Income Tax Act, 1961, must first consider the capital loss incurred before applying any deductions. The court clarified that the capital gain should be calculated as the profits derived from the sale of shares minus the losses sustained in the same financial year. The court emphasized that the income from capital gains forms a separate head of income under the Act, and the provisions for deduction must be applied to the net capital gain after accounting for any losses. Consequently, the court dismissed the appeal, agreeing with the High Court's interpretation of the law. |
| Summary |
This case revolves around the computation of long-term capital gains under the Income Tax Act, 1961, specifically focusing on sections 70(2)(ii) and 80-T. The Supreme Court of India addressed the issue of how to treat capital gains and losses incurred in the same financial year. The appellant, a registered firm, had realized a gross long-term capital gain from the sale of shares but also incurred a significant long-term capital loss. The court ruled that the deductions allowed under section 80-T should be applied to the capital gains only after the capital losses were deducted, thus emphasizing the need for accurate calculation of net capital gains. This case is significant for tax law practitioners as it clarifies the treatment of capital gains and losses, ensuring compliance with the provisions of the Income Tax Act. Keywords such as 'Income Tax Act', 'capital gains', 'deductions', and 'Supreme Court ruling' are pivotal for legal professionals and those interested in tax law. |
| Court |
Supreme Court of India
|
| Entities Involved |
Not available
|
| Judges |
B.P. Jeevan Reddy,
N. Venkatachalam
|
| Lawyers |
T. A. Ramachandran, Senior Advocate,
Mrs. Janaki Ramachandran, Advocate,
K. N. Shukla, Senior Advocate,
R. Satish, Advocate,
P. Parameswaran, Advocate
|
| Petitioners |
M.S.P. Nadar Sons
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1993 SLD 209,
1993 PTD 1668,
(1993) 201 ITR 1044
|
| Other Citations |
CIT v. M.S.P. Nadar Sons (1989) 179 ITR 55,
CIT v. Canara Workshops (P.) Ltd. (1986) 161 TTR 320 (SC),
CTT v. Sigappi Achi (1983) 140 ITR 448 (Mad.),
CIT v. V. Venkatachalam (1993) 201 ITR 737 (SC)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
70(2)(ii),
80-T
|