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2021 (4) TMI 201 - AT - Income TaxRevision u/s 263 - revised return was filed by the assessee declaring the same total income but claiming higher amount of Long-Term Capital Loss on transfer of Government Securities - Set off of Long-Term Capital Gain from sale of Bonds and right to property against Long Term Capital Loss on sale of Government Securities - HELD THAT - The assessee that it was the duty of the ld. Pr. CIT to ascertain the actual position of the appeal stated to be filed by the assessee against the order passed by the Assessing Officer under section 143(3) on this issue and had he done that, he would have found that the order passed by the AO under section 143(3) on this issue was already merged in the appellate order of the ld. CIT(A) and the claim of the assessee for Long-Term Capital Loss arising from the sale of Government Securities after applying the Cost Inflation Index having been already allowed by the ld. CIT(A), there was no error in the order of the Assessing Officer in allowing the set off of such loss against the Long-Term Capital Gain arising from the Bonds and Right to Property. Claim of the assessee for Long-Term Capital Loss arising from the sale of Government Securities after applying the Cost Inflation Index was disallowed by the Assessing Officer in the order passed under section 143(3) for the year under consideration by relying on the order passed in assessee s own case on the similar issue for A.Y. 2010-11 under section 143(3) read with section 263 - As pointed out by assessee, the said order passed by the Assessing Officer for A.Y. 2010-11 was a subject matter of appeal and the claim of the assessee for Long-Term Capital Loss arising from the sale of Government Securities after applying the Cost Inflation Index was allowed by the Tribunal and following this conclusion drawn in A.Y. 2010-11, the Tribunal has already upheld the appellate order of the ld. CIT(A) dated 28. 02.2019 for the year under consideration allowing the similar claim of the assessee. This issue thus stands decided by the Tribunal on merit in assessee s own case for A.Y. 2010-11 as well as for the year under consideration and we, therefore, do not consider it necessary or expedient to deal with the argument sought to be raised by the ld. CIT, D.R. on merit of this issue. Ground No. 3 of the assessee s appeal is accordingly allowed. Short-term capital gain arising from the sale of flats without taking into consideration the stamp duty valuation - As is evident from the submission made by the assessee before the Assessing Officer during the course of assessment proceedings, the actual sale consideration adopted by the assessee for computation of capital gain arising from the sale of concerned flats which was lower than the stamp duty valuation was duly explained by the assessee and the same was also supported by a valuation report of the registered valuer, which had valued the market value of the flats at ₹ 5. 84 crores just before its sale by the assessee. It is also relevant to note here that a specific request was also made by the assessee to the Assessing Officer to refer the matter relating to the valuation of the property to DVO in terms of section 50C(2) of the Act if the lower sale consideration actually received by the assessee than the stamp duty value as justified by it was not acceptable. No such reference, however, was made by the Assessing Officer and keeping in view the same as well as all the facts of record, we find merit in the contention of the ld. Counsel for the assessee that the explanation/justification offered by the assessee in the matter was found acceptable by the Assessing Officer and on appreciation thereof a well considered view was taken by the Assessing Officer. This issue thus was examined by the Assessing Officer during the course of assessment proceedings and after having satisfied himself with the explanation/justification offered by the assessee, which was duly supported by the valuation report of the Registered Valuer, a possible view was taken by the Assessing Officer accepting the stand of the assessee. In the case of R.K. Construction Co 2008 (7) TMI 354 - GUJARAT HIGH COURT cited by the ld. Counsel for the assessee, it was held by the Hon ble Gujarat High Court that when the necessary details and documents were furnished by the assessee to the Assessing Officer and a particular view was taken by the Assessing Officer on the basis of the same, it was not open for the Commissioner to take a different view in the revision proceedings under section 263 of the Act. If the facts of the present case as discussed above are considered in the light of the decision of the Hon ble Gujarat High Court in the case of R.K. Construction Co. (supra), we find that there was no error in the order of the Assessing Officer on this issue as alleged by the ld. Pr. CIT and the impugned order passed by the ld. Pr. CIT revising the order of the Assessing Officer on this issue is not sustainable. Income and year of taxability of the profit arising to the assessee from sale of right in 37 flats - HELD THAT - The entire income arising from the sale of right in 37 flats was offered by the assessee in A. Y. 2015-16 under the had long-term capital gain and when the Assessing Officer assessed the same as business income of the assessee, an appeal was filed by the assessee before the ld. CIT(A), who allowed the appeal of the assessee on this issue and directed the Assessing Officer to assess the income arising to the assessee from the sale of flats under the head long-term capital gain . This decision rendered by the ld. CIT(A) has already been upheld by the ITAT 2019 (12) TMI 1281 - ITAT KOLKATA . Keeping in view the same, we find merit in the contention of the ld. Counsel for the assessee that both these issues relating to head of income under which the income in question is chargeable to tax as well as the year of taxability of the same have already been decided by the Tribunal in assessee s own case for A.Y. 2015-16 and consequently the order of the Assessing Officer passed for the year under consideration under section 143(3), which is in consonance with the view taken by the Tribunal, cannot be said to be erroneous as alleged by the ld. Pr. CIT. We, therefore, set aside the impugned order passed by the ld. Pr. CIT under section 263 on this issue and restore that of the Assessing Officer. Assessee appeal allowed.
Issues Involved:
1. Set off of Long-Term Capital Gains (LTCG) against Long-Term Capital Loss (LTCL). 2. Treatment of gains from the sale of Gold ETFs. 3. Applicability of Section 50C for computing Short-Term Capital Gains (STCG) on the sale of depreciable assets. 4. Treatment of income from the sale of rights in property under the head 'Capital Gains' or 'Business Income'. Detailed Analysis: 1. Set off of Long-Term Capital Gains (LTCG) against Long-Term Capital Loss (LTCL): The assessee claimed set off of LTCG from the sale of Bonds and Right to Property against LTCL from the sale of Government Securities. The Principal CIT found that the Assessing Officer (AO) had allowed the set off without disallowing the indexation benefit on Government Securities, which should have been treated as bonds or debentures, thus not eligible for indexation. The Tribunal noted that the CIT(A) had already allowed the assessee's claim for LTCL on Government Securities by applying the Cost Inflation Index in an earlier appeal, thus merging the AO's order with the appellate order. Therefore, the Principal CIT's revision under section 263 was beyond scope as per Explanation 1(c) below sub-section (1) of section 263. The Tribunal found no error in the AO's order allowing the set off of such loss against LTCG from Bonds and Right to Property. 2. Treatment of gains from the sale of Gold ETFs: The Principal CIT observed that the AO had incorrectly treated the gains from the sale of Gold ETFs as LTCG instead of STCG, as the holding period was less than 36 months. The assessee accepted this error, and the Tribunal upheld the Principal CIT's finding that the AO's order was erroneous in this regard. 3. Applicability of Section 50C for computing Short-Term Capital Gains (STCG) on the sale of depreciable assets: The Principal CIT found that the AO had failed to consider the stamp duty valuation while computing STCG on the sale of four depreciable flats. The Tribunal noted that the AO had raised specific queries regarding the sale consideration, and the assessee had provided explanations supported by a valuation report from a registered valuer. The AO, after being satisfied with the explanation, did not refer the matter to the DVO under section 50C(2). The Tribunal held that the AO had taken a possible view after due consideration, and it was not open for the Principal CIT to take a different view under section 263. The Tribunal set aside the Principal CIT's order on this issue and restored the AO's order. 4. Treatment of income from the sale of rights in property under the head 'Capital Gains' or 'Business Income': The Principal CIT treated the income from the sale of rights in 37 flats as business income, arguing that the assessee's intention was to sell at a profit, and the transactions were in the nature of trade. The Tribunal noted that the assessee had offered the income as long-term capital gain in AY 2015-16, and the CIT(A) had accepted this treatment. The Tribunal had also upheld the CIT(A)'s decision in a previous order. Since the issue had already been decided by the Tribunal, the AO's order for the year under consideration, which was in line with the Tribunal's view, could not be said to be erroneous. The Tribunal set aside the Principal CIT's order on this issue and restored the AO's order. Conclusion: The Tribunal allowed the appeal filed by the assessee, setting aside the Principal CIT's order under section 263 and restoring the original assessment order passed by the AO.
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