TMI Blog2022 (12) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... proportion to the assessee and his wife Nothing has been brought on record that due to the alleged lack of ownership of the assessee, the title in the property has not been legally transferred to the purchaser. Therefore, we are of the considered opinion that the learned CIT(A) has rightly accepted the long-term capital gain in the hands of the assessee. Addition made by the AO by treating the part consideration from the sale of Skylark flat as unexplained credit - We find that the registered deed of transfer whereby the said flat was sold to the third party was already available on record before the AO and therefore in the aforesaid circumstances the amount of sale consideration received by the assessee, being the joint owner of the flat, cannot be held to be unexplained credit in the hands of the assessee. Thus, we find no infirmity in the impugned order passed by the learned CIT(A) on this issue. As a result, grounds No. 1 and 2 raised in Revenue s appeal are dismissed. Set off of long-term capital loss arising from STT paid transactions against long-term capital gain arising from the sale of the flat - HELD THAT:- It has not been denied by the assessee that the lon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been filed. The appellant prays that the order of CIT(A)-49, Mumbai on the above grounds be set aside and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any ground and/or add new grounds which may be necessary. 3. The issue arising in grounds No. 1 and 2, raised in Revenue s appeal, is pertaining to long-term capital gain earned from the sale of a flat. 4. The brief facts of the case as emanating from the record are: The assessee is an individual and during the year under consideration assessee s main source of income consists of salary, income from house property, capital gain, and income from other sources. For the relevant year, the assessee filed its return of income on 17/08/2015, declaring a total income of Rs. 2,81,69,870. The return filed by the assessee was selected for limited scrutiny through CASS. During the assessment proceedings, it was observed that the assessee has claimed to have sold a flat at Skylark Co-operative Housing Society Ltd ( Skylark flat ) declaring a long-term capital gain of Rs. 7,25,08,820, against consideration of Rs. 7,62,50,000, (being 50% sale consideration of the flat). The gain so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of Rs. 4,25,000, by him during 1992 i.e. part of purchase consideration. Accordingly, the AO held that the half consideration received by the assessee amounting to Rs. 7,62,50,000, is taxable in the hands of the actual owner of the half share of the Skylark flat i.e. mother of the assessee. Further, consideration received on the sale of Skylark flat and consequent set off against such considerations/gain cannot be considered in the hands of the assessee. The AO also proceeded to add the aforesaid amount of Rs. 7,62,50,000, as unexplained credit in the hands of the assessee on the basis that the aforesaid amount was received by the assessee without any ownership of any asset. 5. The learned CIT(A) vide impugned order allowed the appeal filed by the assessee on this issue, by observing as under: 6.6 The assessee's name has been included as a joint owner in the shares issued by the Skylark co-operative housing society. The assessee was able to sell the flat vide a registered sale deed as he was the rightful owner of 50% of the shares. Otherwise, the registration would not have taken place. In fact, the other 50% share of the flat was owned by Mrs. Enakshi Sujan Parik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. On the contrary, the learned Authorised Representative ( learned AR ) submitted that the assessee along with his wife has sold the flats to a third party, and without being the legal owner registration could not have taken place. Further, the assessee also paid part of the purchase consideration in the year 1992 and enjoyed 50% ownership of the said flat till it was sold in the year 2014. 8. We have considered the rival submissions and perused the material available on record. In the present case, the AO has treated the assessee to be not the owner of 50% share in the Skylark flat. As per the AO, the decree order of the Hon ble Court on Small Causes at Bombay was in favour of the mother of the assessee, however, without any sanction of law and based on flimsy grounds both the assessee and his mother gave joint representation to the Skylark Co-operative Housing Society Ltd to transfer/mutate the shares on their joint names. Though, the AO has made the above allegations, however, has not produced anything on record to suggest any dispute by any party challenging the name of the assessee as a joint holder of shares certificates along with his mother. Further, it has also no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f mutual funds and carried forward long term capital loss of Rs. 1,59,75,965, on account of sale of mutual funds during the previous years. The AO vide assessment order denied the claim of set off of long-term capital loss against the long-term capital gain from the sale of the flat. In appeal, learned CIT(A) vide impugned order following the decision of the coordinate bench of the Tribunal in M/s Raptakos Breet Co. Ltd., ITA No. 3317/Mum./2009, decided this issue in favour of the assessee. Being aggrieved, the Revenue is in appeal before us. 12. During the hearing, learned DR submitted that on this issue there are divergent views of the coordinate bench of the Tribunal, however, the Hon ble Kerala High Court in Appolo Tyres Ltd vs DCIT, (2022) 284 Taxman 229 (Kerala) has decided this issue in favour of the Revenue and held that Long-term capital loss arising out of the sale of shares and units of mutual funds on which STT was paid and covered under section 10(38) could not be set off against long-term capital gain arising out of the sale of land as per section 70(3) of the Act. 13. On the contrary, learned AR placed reliance upon the impugned order passed by the learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee shall be entitled to have the amount of such loss set-off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset not being a short-term capital asset. 7.2 There is no quarrel between the assessee and the Revenue that the shares and units of mutual funds sold by the assessee would come under section 10(38) of the Act. Thus had there been income such income is excluded from the computation of income of the assessee Sections 48 to 55 deal with the computation of long term capital gains by the assessee. The principle laid down by the Supreme Court in Harprasad Co. case is to the effect that income is inclusive of profit and loss re both positive and negative effects of the transaction Hence, it is legal and correct not to introduce the entry of sale of shares in the computation of income under sections 48 to 55. The set-off of loss etc is dealt with by section 70(3) of the Act. 7.3 Let us understand see 70(3) as follows: Set-off of loss from one source against income from another source, important words are under the same head of income. Next, section 70(3) is applicable or attra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (Appeals) and the Tribunal have merely adopted the conclusions recorded by the Assessing Officer. After independently examining the implication of each one of the Sections and the principle laid down by the Supreme Court in Harprasad Co. (P) Ltd case (pra) we are of the view that no exception to the view taken by the Assessing Officer, as confirmed by the CIT (Appeals) and Tribunal could be taken by us as well. 8. The decisions relied on by the assessee are distinguishable on facts. Therefore, we won't burden the judgment by stating how these decisions are distinguishable both in fact and law, We have perused the judgment of the Gujarat High Court in Kishorebhai Virani case and are in agreement with the view taken by the Gujarat High Court. The question of law in the appeal, upon our independent consideration and also by following the principle laid down in Harprasad Co. (P) Ltd. case (supra) as applied in Kishorebbai Virani case, will be answered in favour of the Revenue, and against the assessee. 16. Thus, respectfully following the aforesaid decision of the Hon ble Kerala High Court, the claim of the assessee of set off of long-term capital loss arising from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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