2013 (10) TMI 1499 - AT - Income Tax

Tribunal Grants Partial Relief: Exemption Claim Allowed, LTCL Set Off Denied, Income Issue Remanded, Interest Recomputed.

The Tribunal partly allowed the assessee's appeal. It granted the claimed exemption u/s 54F for Rs. 46,11,166, rejecting the Assessing Officer's ... Exemption u/s 54F of the Act - Period of limitation for investment in new House Property - Date of booking of flat is 19.1.2006 and Sale Deed date is 11.9.2008 date of housing loan is 24.5.2006 which was invested in the said property before 31.3.2007. The Revenue contended that since various courts have held that the only condition to be satisfied is that the new residential property should be purchased within the specified period of one year before or with two years after the sale of the old capital asset. HELD THAT: - 1) The amounts paid by the assessee on booking of the asset i.e. flat at Gokulam, Kanakpura Road on 9.1.2006 and the housing loan of ₹ 40 lakh for investment in the purchase thereof have not vested the assessee with ownership of the new asset. The assessee has been vested with the ownership of the new flat only by virtue of the Registered Sale Deed dt.11.9.2008. In this view of the matter, we find that the authorities below have erred in restricting the exemption under section 54F of the Act to ₹ 6,23,433. - Decided in favor of the assessee. Set off of long term capital loss incurred on sale of long term listed shares against LTCG on sale of immovable property- HELD THAT - We are of the view that the set off of LTCL on sale of listed securities, whose income is exempt under section 10(38) of the Act, against LTCG immovable property/as claimed by the assessee, is contrary to law and the intention, object and purpose of the Legislation in introducing clause 10(38) of the Act. - Decided against the assessee. Levying the interest u/s.234B and interest u/s.234C- HELD THAT- The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. The Assessing Officer is, however, directed to recompute the interest chargeable under section 234B of the Act, if any, while giving effect to this order. Issues Involved:1. Exemption u/s 54F of the Act.2. Set off of Long Term Capital Loss (LTCL) on sale of securities.3. Total income declared by assessee.4. Charging of Interest u/s 234B of the Act.Summary:1. Exemption u/s 54F of the Act:The assessee challenged the restriction of exemption u/s 54F to Rs. 6,23,433 against the claimed Rs. 46,11,166. The assessee received compensation of Rs. 84,64,701 for land acquired by BMRCL and purchased a flat for Rs. 50,98,720. The Assessing Officer restricted the exemption, citing that the flat booking and housing loan were made more than a year before the compensation receipt. The Tribunal found that ownership of the new asset was vested only by the Registered Sale Deed dated 11.9.2008. Therefore, the assessee is entitled to exemption u/s 54F to the extent of Rs. 46,11,166 as claimed.2. Set off of Long Term Capital Loss (LTCL) on sale of securities:The assessee contended that the Assessing Officer erred in disallowing the set off of LTCL of Rs. 3,22,314 against LTCG on sale of immovable property. The Tribunal, following the reasoning of the Mumbai Tribunal in G.K. Ramamurthy's case, held that set off of LTCL on sale of listed securities, whose income is exempt u/s 10(38), against LTCG on immovable property is contrary to law. Thus, the assessee's claim was rejected.3. Total income declared by assessee:The assessee argued that the Assessing Officer incorrectly adopted the returned income at Rs. 27,98,530 instead of Rs. 26,48,610. The Tribunal found that this issue was raised before the CIT(Appeals) but was not addressed. Therefore, the matter was restored to the CIT(Appeals) for examination and verification of the correct figure of income as returned.4. Charging of Interest u/s 234B of the Act:The assessee challenged the charging of interest u/s 234B amounting to Rs. 2,20,341. The Tribunal upheld the Assessing Officer's action, stating that charging of interest is consequential and mandatory. However, the Assessing Officer was directed to recompute the interest chargeable while giving effect to this order.Conclusion:The assessee's appeal was partly allowed.