TMI Blog2013 (10) TMI 1499X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's claim for set off of Long Term Capital Loss (LTCL) on sale of listed securities of ₹ 3,22,314 against Long Term Capital Gain (LTCG) arising on sale of land. (ii) Recomputation of the LTCG on sale of land and restriction of the Exemption under section 54F to ₹ 6,23,433 as against ₹ 46,11,166 claimed by the assessee. 2.2 Aggrieved by the order of assessment for Assessment Year 2009-10 dt.22.12.2011, the assessee preferred an appeal before the CIT(Appeals) - I, Bangalore. The learned CIT (Appeals) dismissed the assessee's appeal by order dt.6.8.2012. 3. Aggrieved by the order of the CIT(Appeals) - I, Bangalore for Assessment Year 2009-10 dt.6.8.2012, the assessee is now in appeal before us raising the following grounds : 1. That the impugned order of assessment is liable to set aside insofar as the impugned order made by the Respondent Officer is regular, incorrect, improper, unlawful and opposed to facts of the case and law 2. The learned CIT (Appeals) erred in upholding the order of the Assessing Officer disregarding the fact that the appellant had complied with the conditions stipulated u/s. 54F(1) of the Income-tax Act, 1961. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 50,98,720 (inclusive ₹ 4,09,370 for amenities) under Registered Sale Deed dt.11.9.2008. In the return of income for the relevant period, the assessee declared net LTCG of ₹ 25,81,526 thereon which was revised to ₹ 30,41,414, thereby claiming exemption of ₹ 46,11,166 u/s.54F of the Act. 5.2.2 The Assessing Officer on examination of the assessee's computation of LTCG and exemption of ₹ 46,11,166 claimed u/s.54F of the Act found that the assessee had booked a flat on 19.1.2006 and then taken a loan of ₹ 40 lakh from Syndicate Bank, Yeshwantpur Branch, Bangalore, which was sanctioned on 24.5.2006, for investment in the purchase of the said flat. The Assessing Officer noted that as per the assessee's admission, an amount of ₹ 44,70,852 was paid in this connection by 31.3.2007 i.e. more than a year prior to the acquisition of the new asset. In these circumstances, the Assessing Officer held that the proven cost of the new asset is only ₹ 46,89,350 since the balance amount of ₹ 4,09,370 paid towards electrical, water and sanitary connections and deposits do not qualify for being considered for exemption u/s.54F of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The issues raised by the authorities below to deny the assessee the said exemption u/s.54F viz. (i) that the booking for the said flat was made by the assessee on 19.1.2006; (ii) that a loan of ₹ 40 lakh was taken from Syndicate Bank on 24.5.2006 towards investment in the said flat being more than one year, prior to sale acquisition of the said property on 21.7.2008, the learned Authorised Representative submits, is not material, since the assessee has acquired the new property i.e. ;the flat, only on 11.9.2008 by Registered Sale Deed and not before that. The learned Authorised Representative submits that all acts by the assessee to book the said flat in 2006 and availing of housing loan for investing therein in 2006 do not confer ownership of the said property in the said flat. In this view of the matter, the assessee prays that he is entitled to be granted exemption u/s.54F of the Act as claimed by it. In support of the assessee's claim for deduction u/s.54F of the Act, the learned Authorised Representative inter alia relied on the following judicial pronouncements : (i) CIT v. TN Arvinda Reddy [1979] 120 ITR 46/2 Taxman 541 (SC). (ii) ITO v. K.C. Gopalan [1999 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Less : Cost inflation index 7,81,455 8,09,132 (iii) Long Term Capital Gains 76,80,246 76,52,580 (iv) Less : Exemption (a) u/s. 54 (b) u/s.54F: 50.98.720 76.52.580 50,98,720 46,11,166 84,61,712 (v) Net Long Term Capital Gains 25,81,526 30,41,414 5.5.3 There is no dispute that the LTCG on this transaction is ₹ 76,80,240. How the Assessing Officer on examination of the assessee's claim for exemption under section 54F of the Act, restricted the assessee's claim from ₹ 46,11,166 to ₹ 6,23,433 for the reasons that :- (i) though the asset i.e. the flat was purchased by the assessee by Regd. Sale Deed dt.11.9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat even sub-sections (1) and (3) of section 71 of the Act which deal with set off of losses does not exclude capital loss arising on sale of listed securities as contemplated u/s.10(38) of the Act. Similarly, it is submitted that, even under section 74 of the Act which deals with set off of losses under the head Capital Gains, it does not exclude capital loss arising from sale of listed securities as contemplated u/s.10(38) of the Act. The learned Authorised Representative contends that where the Legislature intended to exclude any kind of losses from being set off, they have done so specifically and therefore, it is evident that the exemption given under section 10(38) does not mean that the loss incurred on such shares as contemplated under section 10(38) of the Act can be denied being allowed set off under sections 70, 71 and 74 of the Act. In view of this, the learned Authorised Representative prays that the LTCL of ₹ 3,22,314 be allowed to be set off against the LTCG on sale of immovable property as contemplated u/s.70(3) of the Act. In support of this proposition, the learned Authorised Representative relied on the decision of the co-ordinate bench of the Mumbai Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh this matter was raised in the appeal before the CIT(Appeals) as ground No.5, the learned CIT (Appeals) failed to address this ground. 8.2 Both sides have been heard in the matter. On a perusal of the records before us, we find that as contended by the learned Authorised Representative, the assessee had in fact raised this issue at ground of appeal at S.No.5 before the learned CIT (Appeals), which he has failed to address. In this view of the matter, we restore this ground to the file of the CIT(Appeals) with the direction to dispose off the ground No.5 raised in the appeal before him after examination and verification of the claim of the assessee in respect of adoption of the correct figure of income as returned in the return of income for Assessment Year 2009-10. It is ordered accordingly. 9. Charging of Interest under section 234B of the Act : ₹ 2,20,341. 9.1 In the Ground at S.No.7, the assessee challenges the action of the Assessing Officer in charging him interest under section 234B of the Act for Assessment Year 2009-10. The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. In this view of the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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