TaxTMI 
TaxTMI 
2021 (5) TMI 145
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....such source des not enter into the computation of income as the same gets excluded at the threshold itself. Therefore, loss from such source is not available for set off or for carry forward for set- off against income chargeable to tax. Therefore, while the computation of Long Term Capital Gain/Loss on the sale off the said shares is accepted as correct, the aforesaid net Long Term Capital Loss (Rs. 4,45,74,513 /-) shall not be carried forward for set-off against Long Term Capital Gain, if any, in the succeeding years." 3. The ld. CIT (A) supported the action of the Assessing Officer relying on the FAQ dated 04.02.2018 issued by CBDT. The question 23 of the said instructions is as under: "Q23. What will be the treatment of long-term capital loss arising from transfer made between 1st February, 2018 and 31s t March, 2018? Ans.23. As the exemption from long- term capital gains under clause (38) of section 10 will be available for transfer made between 1st February, 2018 and 31st March, 2018, the long- term capital loss arising during this period will not be allowed to be set-off or carried forward." 4. Aggrieved the assessee filed appeal before us. 5. The ld. AR mainly argued....
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.... of transfer as defined u/s 2(47) of the I. T. Act. 1961. 3. The receipt then has to be considered from the view of specific provision of exemption under Chapter III of the Income Tax Act, 1961. The Privy Council in its landmark judgment in Gopal Saran Narain Singh vs CIT (1935) 3 ITR 237 PC] laid down that "anything that can be properly described as income is taxable under the Act unless expressly exempted". Chapter III explicitly provides for the income which does not form part of total income. If the receipt is covered by the provisions of Chapter III, particularly Section 10, then even if the receipt is in nature of the income it cannot be assessed as income. Only the receipts which have passed the above tests are to be assessed as income of an assessee as per the provisions of Chapter IV for computing the total income of an assessee. The question of setting of losses or carry forward of losses provided for under Chapter VI of the I.T. Act, 1961 will arise only when the computation of income is so done. 4. Now kind attention is drawn to 10(38) of the I.T. Act, 1961 for the purpose of analyzing whether the receipt would form the part of total income of assessee or not, it is....
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.... the assessee if the income from the transfer of long term asset being equity share is exempt under Section 10(38) then there is no mandate to compute to long term capital gain or loss for the purposes of Section 10(38). In case the interpretation that it is the capital gain which is exempt u/ s 10(38) is taken, then such interpretation would be not in harmony with scheme of Act for computation of income of assessee. Needless to say such an interpretation would also unsettled the trite legal position whereby losses from agricultural activities and earning dividend will also be claimed for setoff. To summarize the Hon' ble Bench may kindly appreciate that the allowability of deduction for income exempt under Section 10 (38) cannot be done selectively only when the expenses exceed the income. Thus it does not matter whether an assessee had gain or loss from transfer of long term capital asset being equity share in a company where such transaction is chargeable to STT, since the entire receipt from such transfer is exempt under Section 10 (38). Kind attention is also drawn to section 14 A of the Act, which provides that "for the purpose of computing total income under Chapter IV, no....
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....uld legislate only for the purpose of bringing about an effective result The principles indicated in the said cases were reiterated by this Court in Mohan Kumar Singhania v. Union of India (AIR 1992 SC 1). The statute must be read as a whole and one provision of the Act should be construed with reference to other provisions in the same Act so as to make a consistent enactment of the whole statute. 6.6 The Court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare clause with other parts of the law and the setting in which the clause to be interpreted occurs. [ See R. S. Raghunalh v. State of Karnataka and Anr. (AIR 1992 SC 81)]. Such a construction has the merit of avoiding any inconsistency or repugnancy either wnthin a section or between two different sections or provisions of the same statute. It is the duty of the Court to avoid a head on clash between two sections of the same Act. [See Sultana Begum v. Prem Chand Jain (AIR 1997 SC 1006)] Whenever it is possible to do so, it must be done to construe the provisions which appear to conflict so that they harmonize. It shoul....
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....uties of an office or employment of profit; (iiib) any allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed by him or at a place where he ordinarily resides or to compensate him for the increased cost of living; (iv) the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or by a relative of the director or such person, and any sum paid by any such company in respect of any obligation which, but for such payment, would have been payable by the director or other person aforesaid; (iva) the value of any benefit or perquisite, whether convertible into money or not, obtained by any representative assessee mentioned in clause (iii) or clause (iv) of sub- section (1) of section 160 or by any person on whose behalf or for whose benefit any income is receivable by the representative assessee (such person being hereafter in this sub- clause referred to as the " beneficiary") and any sum paid by the representative assessee in respect of any obligati....
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....) of section 28; (xiii) any sum referred to in clause (v) of sub-section (2) of section 56 ; (xiv) any sum referred to in clause (vi) of sub- section (2) of section 56 ; (xv) any sum of money or value of property referred to in clause (vii) or clause (viia) of sub- section (2) of section 56 ; (xvi) any consideration received for issue of shares as exceeds the fair market value of the shares referred to in clause (viib) of sub- section (2) of section 56; (xvii) any sum of money referred to in clause (ix) of sub- section (2) of section 56 ; (xviia) any sum of money or value of property referred to in clause (x) of sub-section (2) of section 56 ; (xviib) any compensation or other payment referred to in clause (xi) of sub-section (2) of section 56; (xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement (by whatever name called) by the Central Government or a State Government or any authority or body or agency in cash or kind to the assessee other than,- (a) the subsidy or grant or reimbursement which is taken into account for determination of the actual cost of the asset in accordance with the pro....
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....of more than sixty- five per cent of the total proceeds of such fund; and (ii) which has been set up under a scheme of a Mutual Fund specified under clause (23D): Provided that the percentage of equity share holding of the fund shall be computed with reference to the annual average of the monthly averages of the opening and closing figures; (b) "International Financial Services Centre" shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005); (c) "recognised stock exchange" shall have the meaning assigned to it in clause (ii) of the Explanation 1 to sub-section (5) of section 43 " Section 71: "[Set off of loss from one head against income from another. 71. (1) Where in respect of any assessment year the net result of the computation under any head of income, other than "Capital gains", is a loss and the assessee has no income under the head "Capital gains", he shall, subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head. (2) Where in respect of any assessment year, the net r....
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....st income, if any, under the head "Capital gains" assessable for that assessment year in respect of any other capital asset; (b) in so far as such loss relates to a long-term capital asset, it shall be set off against income, if any, under the head "Capital gains" assessable for that assessment year in respect of any other capital asset not being a short-term capital asset; (c) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on.] (2) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed. (3) [Omitted by the Finance Act, 2002, w.e. f. 1 -4-2003.]" 9. On concurrent reading of the provisions of the Sections quoted above, we find that the Section 74 has not been made and cannot be made otiose. The provisions of Section 10(38) and Section 74 have to be read harmoniously but not antagonistically. We hold that the decision of the ld. CIT (A) is on incorrect interpretation of the provisions of the Act and hence cannot be sustained. ITA No. 241/ Del/2019 A. Y. 2013-14 10. The....
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.... property that are transferable capital assets. Hence, booking rights or rights to purchase the apartment or rights to obtain title to the apartment are also capital assets that can be transferable. 16. A contract for sale of flat was capable of specific performance and was also and therefore, a right in an uncompleted building or a flat was clearly a property as contemplated by Section 2 (14). P&H High Court in case of Vinod Kumar Jain v. Commissioner of Income-tax, [2010- 195 TAXMAN 174 (PUNJ. & HAR.) has ruled that the right to acquire property through "agreement for sale" under section 54 of Transfer of Property Act is an actionable claim which is capable of being transferred. Thus, it is a capital asset under section 2 (14) as per the provisions of the Income-tax Act, 1961. The period of holding is to be reckoned from the date of first agreement while calculating capital gain on sale of such property. 17. From the facts of the case, the assessee having paid Rs. 63,30,963 /- to the builder has transferred the buying right to the seller. The seller has paid the remaining amount of Rs. 2,82,326 /- to the builder subsequently. The AO held that as per the clause in the purchase a....