TaxTMI 
TaxTMI 
2013 (10) TMI 1499
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....additions/disallowances : (i) Disallowance of the assessee's claim for set off of Long Term Capital Loss (LTCL) on sale of listed securities of Rs. 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 Rs. 6,23,433 as against Rs. 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 ....
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.....7.2008. The assessee purchased a flat for a total cost of Rs. 50,98,720 (inclusive Rs. 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 Rs. 25,81,526 thereon which was revised to Rs. 30,41,414, thereby claiming exemption of Rs. 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 Rs. 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 Rs. 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 Rs. 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 Rs. 46,89,350 since the balance amount of Rs. 4,09,370 paid towards electrical, water and sanitary connections and deposits do not qualify for being considered for exem....
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....es 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 Rs. 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] 1....
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....(iv) Less : Exemption (a) u/s. 54 (b) u/s.54F: 50.98.720 x 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 Rs. 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 Rs. 46,11,166 to Rs. 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.11.9.2008, the booking was made on 9.1.2006 and (ii) a Housing Loan of Rs. 40 lakh was taken from Syndicate Bank on 24.5.2006 which was invested in the said property before 31.3.2007 We do not agree with the view of the authorities below that both these investments amounting to Rs. 44,70,852 being made more than one year prior to the date of receipt of compensation of Rs. 84,61,701 for the asset, on 21.7.2008, the assessee would not be eligible for exemption under section 54F of the Act to the extent cla....
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....es 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 Rs. 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 Tribunal in the case of G.K. Ramamurthy v. Jt. CIT [2010] 37 SOT 345. 7.2 Per contra, the learned Departmental Representative supported the orders of the authorities below. 7.3 We have heard both parties and perused and carefully considered the material on record. Admittedly the assessee, in the period under consideration, incurred a loss of Rs. 3,22,314 in respect of listed securities the income of which is exempt under section 10(38) of the Act and which the assessee sought to set off against the LTCG arising on sale of immovable property in the s....