Assessee claimed carry forward of long-term capital loss and short-term capital loss .Assessing Officer assessed total income at same amount as declared by assessee, but reduced quantum of carried-forward losses. CIT(A) up held the order of the AO .On appeal the Tribunal held that   Chapter III prescribes incomes which are not to be included in total Income and from scheme as prescribed in Income-tax Act, it is very much clear that exempted incomes do not enter into computation of total Income and hence such incomes are not available for set-off of any loss .Accordingly  short-term capital loss from shares could not have been set off against any tax-exempt income covered under Chapter III and thus, revenue was not justified in disallowing assessee’s claim for carry forward of loss, by setting off same against long-term capital gains from shares which was tax-exempt under section 10(38) of the Act . Relied on  Kishorbhai Bhikhabhai Virani v. ACIT( 2014 ) 367 ITR 261 ( Guj)(HC) , Raptakos Brett & Co. Ltd., v. Dy. CIT ( 2015) 69 SOT 383 ( Mum)( Trib)  ( AY. 2016 -17)