K.S. Jhaveri, J.

1. This Tax Appeal u/s. 260A of the Income-tax Act, 1961 is filed against the order dated 07.07.2008 passed by the Income Tax Appellate Tribunal, Ahmedabad in ITA No. 3796/Ahd/2004 raising the following substantial question of law for our determination:

"Whether the Income Tax Appellate Tribunal was justified in holding that the claim of capital loss of Rs. 61,45,052/- could not have been disallowed ?"

2. The assessee Company is engaged in the business of trading-in shares and securities. filed his return of income for the A.Y. 2001-02 on 12.10.2001 declaring total income of Rs. 3,92,910/-, which included long term capital gain of Rs. 2,20,954/-. The same was processed u/s. 143(1) of the Act. Subsequently, the case was selected for limited scrutiny and thereafter, assessment order was passed on 25.11.2002 determining the total income at Rs. 4,28,610/-. However, the case was re-opened by issuing Notice u/s. 148 of the Act and ultimately, order was passed on 24.11.2003 declaring total income at Rs. 65,73,662/-.

3. Against the said order, the assessee filed appeal before the CIT(A). The learned CIT(A) partly allowed the appeal, vide order dated 25.10.2004. Being