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2021 (5) TMI 145 - AT - Income TaxTreatment of long-term capital loss arising from transfer of shares - denial of carry forward for set-off against Long Term Capital Gain - whether where income from a particular source is exempt from tax (i.e. incomes exempt under section 10), the gain or loss from transactions such source des not enter into the computation of income as the same gets excluded at the threshold itself, therefore, loss from such source is not available for set off or for carry forward for set- off against income chargeable to tax - HELD THAT:- We find that the Section 74 has not been made and cannot be made otiose. The provisions of Section 10(38) and Section 74 have to be read harmoniously but not antagonistically. We hold that the decision of the ld. CIT (A) is on incorrect interpretation of the provisions of the Act and hence cannot be sustained. LTCG v/s STCG - As the assessee having paid partial sum to the builder has transferred the buying right to the seller. The seller has paid the remaining amount to the builder subsequently - AO held that as per the clause in the purchase agreement which states this agreement shall not be assigned by the apartment allottee without prior permission of the Company and came to the conclusion that the assessee never vested with the right to the property and hence the assessee could not have sold the rights - HELD THAT:- We find that what the assessee has sold is the right and the right arises when the assessee enters into an agreement with the builder in the year 2004-05. Since, such right accrued in the year 2004-05 and the sale took place on 01.05.2012, it attains the nature of sale of Long Term Capital asset and the gains will have to be treated as “Long Term Capital Gains”. The AO is directed to compute the LTCG after taking into consideration, the amount received on account of sale as per the documents - AO shall also verify and consider the deduction paid to the broker. Income from other sources - HELD THAT:- AO is hereby directed to verify from the records whether the amount was offered to tax income from other sources or not and examined whether the correct figure and recomputed the taxable income.
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