AI Drafter 
TaxTMI 
TaxTMI 
2022 (12) TMI 926
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.... (2) On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the addition u/s 68 of the IT Act 1961 as unexplained cash credit, without appreciating the fact that the explanation offered by the assessee in respect of credit of Rs. 7,62,50,000/-, was not satisfactory in the opinion of the AO. (3) On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the AO to allow the ser off long term capital loss claimed by the assessee against the long term capital gains arising from the sale of flat without appreciating the fact that the decision of the Hon'ble ITAT in the case of M/s. Raptakos Brett & Co. Ltd. ITA No. 3317/Mum/2009 & 1692/Mum/2010 for A.Y. 2007-08 has not been accepted by the department and appeal u/s 260A to the High Court has been filed. The appellant prays that the order of CIT(A)-49, Mumbai on the above grounds be set aside and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any ground and/or add new grounds which may be necessary." 3. The issue arising in grounds No. 1 and 2, raised in Revenue's appeal, is pertaining to long....
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....essee, however, without any sanction of law and based on flimsy grounds, the half share of the flat was transferred in the name of the assessee. It was further held that in the eyes of law, the complete share of property continues to be in the name of the mother of the assessee till she sold half share to the wife of the assessee in July 2007. Consequently, thereafter, the mother along with the wife of the assessee are the real owners of the Skylark flat 50% share each. It was further held that even if the assessee is treated as a joint owner, the same is without any benefit during the lifetime of the real ultimate owner. Even the minutes of the meeting of the society nowhere mention 50% ownership for the assessee. Further, the AO held that the assessee has not furnished any evidence of the bank statement indicating payment of Rs. 4,25,000, by him during 1992 i.e. part of purchase consideration. Accordingly, the AO held that the half consideration received by the assessee amounting to Rs. 7,62,50,000, is taxable in the hands of the actual owner of the half share of the Skylark flat i.e. mother of the assessee. Further, consideration received on the sale of Skylark flat and conseque....
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....tisfactory, the same so credited may be charged to income tax as the income of the assessee of that previous year". In this case, the assessee has offered an explanation about the nature and source of the credit of Rs.7,62,50,000/- which has not been denied by the AO. The AO himself states that the amount of Rs.7,62.50,000/- is taxable in the hands of the actual owner Smt. Avani Azad Parikh, When the purpose and source of credit has been explained, there is no case for an addition u/s 68 of the Income Tax Act. Therefore, the addition of Rs.7,62,50,000/- made by the AO as unexplained cash credit is deleted. These grounds of appeal are ALLOWED." Being aggrieved, the Revenue is in appeal before us. 6. During the hearing, the learned Departmental Representative ('learned DR') vehemently relied upon the order passed by the AO. 7. On the contrary, the learned Authorised Representative ('learned AR') submitted that the assessee along with his wife has sold the flats to a third party, and without being the legal owner registration could not have taken place. Further, the assessee also paid part of the purchase consideration in the year 1992 and enjoyed 50% ownership of the said fl....
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....foresaid circumstances the amount of sale consideration received by the assessee, being the joint owner of the flat, cannot be held to be unexplained credit in the hands of the assessee. Thus, we find no infirmity in the impugned order passed by the learned CIT(A) on this issue. As a result, grounds No. 1 and 2 raised in Revenue's appeal are dismissed. 10. The issue arising in ground No. 3, raised in Revenue's appeal, is pertaining to the set off of long-term capital loss arising from STT paid transactions against long-term capital gain arising from the sale of the flat. 11. The brief facts of the case as emanating from the record are: The long-term capital gain earned from the sale of Skylark flat was set off by the assessee against current year losses of Rs. 53,97,182, on account of long-term capital loss on the sale of mutual funds and carried forward long term capital loss of Rs. 1,59,75,965, on account of sale of mutual funds during the previous years. The AO vide assessment order denied the claim of set off of long-term capital loss against the long-term capital gain from the sale of the flat. In appeal, learned CIT(A) vide impugned order following the decision of the c....
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.... (b) such transaction is chargeable to securities transaction tax under that Chapter:" Chapter III of the Act deals with incomes that do not form part of total income. Sections 10 to 13 are various incomes that are treated as not forming part of the income of the assessee Chapter IV deals with the computation of total income Section 14 deals with beads of income. Sections 45 to 55 deal with computation of capital gains Chapter VI deals with aggregation of income and set-off or carry forward of loss. Set-off of loss from one source against income from another source under the same head of income Section 70 reads thus: "(1) xxxxx (2) xxxxx (3) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any capital asset (other than a short-term capital asset) is a loss, the assessee shall be entitled to have the amount of such loss set-off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset not being a short-term capital asset." 7.2 There is no quarrel between the assessee and the Revenue that the ....
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....omputation must have been made under sections 48 to 55 of the Act. The language of section 70(3) is clear and unambiguous In the understanding of this Court, the Parliament intended homogeneous entries to adjust the loss or profit against one another and not introduce heterogeneous elements or entries. Hence, the interpretation adopted by the assessee would give benefits not otherwise intended by the Section. 7.4 The effort of the assessee, in our view, includes an excluded claim, ce a heterogeneous claim under section 70(3) of the Act, by claiming that the homogeneity of long term capital gain is satisfied by the assessee. We are of the view that the application of section 703) by the assessee is incorrect und illegal. The Assessing Officer has very clearly appreciated the objection, applied the law to the circumstances of the case, and recorded the findings. As we have noted supra the CIT (Appeals) and the Tribunal have merely adopted the conclusions recorded by the Assessing Officer. After independently examining the implication of each one of the Sections and the principle laid down by the Supreme Court in Harprasad & Co. (P) Ltd case (pra) we are of the view that no e....