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of <h1>Appeal Dismissed Upholding Disallowance of Exemption & Capital Loss Set Off</h1> <h3>IRM Trust Versus ACIT, Range-11, Ahmedabad</h3> IRM Trust Versus ACIT, Range-11, Ahmedabad - TMI Issues:1. Disallowance of exemption claimed under section 54 of the Income Tax Act.2. Disallowance of set off of brought forward capital loss.Issue 1: Disallowance of exemption claimed under section 54 of the Income Tax Act:The appeal was filed against the Commissioner of Income-Tax (Appeals) order for Assessment Year 2008-09. The assessee contended that the Assessing Officer's order under section 143(3) of the IT Act was illegal and deserved amendment. The main issue was the disallowance of exemption amounting to Rs. 36,85,222 claimed under section 54 of the IT Act. The CIT(A) confirmed the disallowance, stating that the deduction under section 54 is only available to individuals or Hindu Undivided Families, whereas the assessee-trust was classified as an 'AOP'. The CIT(A) also noted that the capital gain arose from the sale of a property that was not used as a residential house, as required by the Act. The Tribunal upheld the CIT(A)'s decision, dismissing the appeal on this ground.Issue 2: Disallowance of set off of brought forward capital loss:The second issue pertained to the disallowance of Rs. 55,91,510 for the set off of brought forward capital loss. The CIT(A) found that no capital loss was declared in the return for AY 2006-07, which should have disclosed the Long Term Capital Loss. The CIT(A) also observed that the assessment for AY 2006-07 did not mention the loss incurred on the sale of shares. Consequently, the CIT(A) concluded that the assessee had not disclosed the Long Term Capital Loss for AY 2006-07 and had not raised the issue before the Assessing Officer. As a result, the set off of carried forward Long Term Capital Loss was deemed not allowable. The Tribunal upheld the CIT(A)'s decision on this issue as well, dismissing the appeal.In summary, the Tribunal dismissed the appeal filed by the assessee against the CIT(A)'s order for Assessment Year 2008-09. The disallowance of the exemption claimed under section 54 of the IT Act and the disallowance of set off of brought forward capital loss were the main issues addressed in the judgment. The Tribunal upheld the CIT(A)'s decisions on both issues, finding no infirmity in the orders.
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