2019 (11) TMI 1708 - AT - Income Tax

Assessee's Appeal Allowed: Set off Long Term Capital Gains/Loss

The Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal, confirming the set off of Long Term Capital Gains against brought forward ... Set off of Long Term Capital Gains (LTCG) against brought forward Long Term Capital Loss (LTCL) - assessee claimed set off of LTCG arising from the sale of flat in Mumbai against brought forward capital loss arising from sale of shares of public limited company listed in Stock Exchange - AO held LTCG where STT is paid, is exempt from tax u/s 10(38) and loss arising from the sale of shares of listed companies in Stock Exchange with STT paid is dead loss and denied set off of Long Term Capital Gains against brought forward loss - HELD THAT:- We find that Co-ordinate Bench of this Tribunal in case of Shri Somnath Vaijanath Sakre [2019 (3) TMI 1689 - ITAT PUNE] for assessment year 2012-13 held that the assessee therein is entitled to set off loss of Long Term Capital Gains from the shares on which security transaction is paid or payable against the Long Term Capital Gains earned from shares on which no security transaction is paid or payable. In order to come to such conclusion, Co-ordinate Bench placed reliance on the order of Mumbai ITAT in the case of Raptakos Brett & Co. Ltd., [2015 (6) TMI 529 - ITAT MUMBAI]. We find the facts and circumstances of the said case are similar, basing on same identical facts. Therefore, in our opinion, in the present case, the assessee is entitled to set off of brought forward losses from Long Term Capital Gains from the shares listed in Stock Exchange on which security transaction is paid or payable - Decided in favour of assessee. Issues:Set off of Long Term Capital Gains against brought forward Long Term Capital Loss.Analysis:Issue 1: Set off of Long Term Capital Gains against brought forward Long Term Capital LossThe case involved two appeals by the Revenue and assessee against separate orders passed by the Commissioner of Income Tax (Appeals) for assessment years 2013-14 and 2012-13. The main issue in both appeals was whether the set off of Long Term Capital Gains (LTCG) against brought forward Long Term Capital Loss (LTCL) was permissible. The Assessing Officer initially denied the set off, considering the loss from the sale of shares as a dead loss. However, the CIT(A) upheld this view. The assessee argued that a similar case for assessment year 2013-14 had been decided in their favor by the CIT(A) and relied on a previous Tribunal order. The Tribunal referred to a Co-ordinate Bench decision and held that the assessee was entitled to set off the losses from Long Term Capital Gains against the gains from shares where security transaction tax (STT) was paid or payable. The Tribunal also cited a Mumbai ITAT case to support its decision. Consequently, the Tribunal allowed the appeal of the assessee for assessment year 2012-13 and dismissed the Revenue's appeal for 2013-14, affirming the set off of Long Term Capital Gains against brought forward Long Term Capital Loss.In conclusion, the Tribunal allowed the appeal of the assessee and dismissed the appeal of the Revenue, confirming the set off of Long Term Capital Gains against brought forward Long Term Capital Loss in both cases.---