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2015 (10) TMI 2314 - ITAT CHENNAIDisallowance under section 54 - AO observed that the assessee could not get the property registered in his name within the period of two years from the date of sale of the original asset and hence the assessee was not eligible for deduction under section 54 - CIT(A) allowed the claim - Held that:- In this case, the assessee sold residential property during the financial year 2006-07 and thereafter entered into an agreement for purchase of new house dated 31.03.2007 for a consideration of ₹ 99,00,000/-. The assessee has paid ₹ 15,00,000/- on 30.07.2007 and subsequently on 25.02.2011, ₹ 50,00,000/- was also paid. As per the section 54, the assessee, after selling the original residential house, he has to invest within the period two years from the date of the original sale. In this case, the assessee has invested an amount of ₹ 15,00,000/- only on 30.07.2007 and final amount was paid only on 25.02.2011, almost after four years of sale of original property.Therefore, the assessee has invested only an amount of ₹ 15,00,000/- as per section 54 of the Act. Therefore, he is eligible only for the amount he has invested as per sub-section (2) of section 54 of the Act. The ld. CIT(Appeals), without considering sub-section (2) of section 54 of the Income Tax Act, proceeded on a different footing that whether the transfer was taken place or not, which is not relevant. Therefore, direct the Assessing Officer to allow the claim of deduction under sub-section (2) of section 54 of the Act to the extent of ₹ 15,00,000/-. - Decided partly in favour of revenue. Disallowance of losses under Future and Options - setting off of brought forward loss - Held that:- The transactions in Future & Options are not to be considered as speculation losses w.e.f. 01.04.2006 consequent to the Finance Act, 2006. In so far as set off of brought forward losses from one head against the income from another head, as per section 71(2) of the Act [with effect from assessment year 2005-06], where in respect of any assessment year, the net result of computation under the head ‘profits and gains of business or profession’ is a loss and the assessee has income assessable under the head ‘salaries’, the assessee shall not be entitled to have such loss to set off against such income. However, it shall be allowable from set off from income from any other head. The ld. CIT(Appeals), by considering the above provisions of law, directed the Assessing Officer to allow the set off of brought forward loss against one head to another head i.e. the claim of loss from Future & Options has to be set off against the capital gains income from the sale of house property. In view of the above, we find that the ld. CIT(Appeals) has correctly directed the Assessing Officer by following the section 71(2a) of the Act. Accordingly, we find no infirmity in the order passed by the ld. CIT(Appeals) on this issue, which is confirmed. - Decided against revenue.
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