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TMI Blog2013 (10) TMI 1499X X X X Extracts X X X X X X X X Extracts X X X X ..... e erred in restricting the exemption under section 54F of the Act to ₹ 6,23,433. - Decided in favor of the assessee. Set off of long term capital loss incurred on sale of long term listed shares against LTCG on sale of immovable property- HELD THAT - We are of the view that the set off of LTCL on sale of listed securities, whose income is exempt under section 10(38) of the Act, against LTCG immovable property/as claimed by the assessee, is contrary to law and the intention, object and purpose of the Legislation in introducing clause 10(38) of the Act. - Decided against the assessee. Levying the interest u/s.234B and interest u/s.234C- HELD THAT- The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. The Assessing Officer is, however, directed to recompute the interest chargeable under section 234B of the Act, if any, while giving effect to this order. - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND Jason P. Boaz, ACCOUNTANT MEMBER For the Appellant : K.Y. Ningoji Rao For the Respondent : A. Sundararajan ORDER Jason P. Boaz, Accountant Member This appeal by the assessee is directed against the order of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition stipulated u/s.54F(1) of the Income-tax Act, 1961. 5. That the learned Assessing Officer erred in disallowing the set off of long term capital loss of ₹ 3,22,314 incurred on sale of long term listed shares disregarding the provisions of section 70 of the Act. 6. That the learned Assessing Officer erred in reckoning the returned income of ₹ 27,98,530 as against ₹ 26,48,610 actually returned by the appellant. 7. That the Assessing Officer erred in levying the interest of ₹ 2,20,341 u/s.234B though the appellant is not liable therefor and as such the same is liable to set aside. 8. That the Respondent Officer erred in levying the interest of ₹ 24,674 u/s.234C though the appellant is not liable therefor and as such the same is liable to set aside. 4. The Ground at S.No. 1 is general in nature and not being urged before us, no adjudication is called for thereon. 5. Exemption u/s.54F of the Act 5.1 The Grounds at S.Nos.2 to 4 challenge the orders of the authorities below in restricting the assessee's claim for exemption under section 54F of the Act to ₹ 6,23,433 as against ₹ 46,11,166 claimed by the assessee by totally disregarding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is not eligible for exemption under section 54F of the Act as claimed. 5.3 The learned Authorised Representative was heard at length on the assessee's claim for exemption under section 54F of the Act in the case on hand. The arguments put forth before us were a reiteration of those put forth before the learned CIT (Appeals) and reproduced in that order at pages 6 to 14 of his order. In this regard the learned Authorised Representative submitted that as per section 54F(1), the only condition required to be satisfied for the assessee to avail the exemption thereunder was that the assessee should within a period of one year before or two years after the date of transfer, purchase or within a period of three years construct a residential property. It is submitted by the learned Authorised Representative that there is no dispute with regard to the fact that the assessee received compensation of ₹ 84,61,701 as compensation for acquisition of the land i.e. the old asset acquired for the Bangalore Metro on 21.7.2008. The learned Authorised Representative further submitted that there was also no dispute with regard to the fact that the assessee acquired a residential flat at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act reads as under : 54F. Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house.-(1) Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, ... 5.5.2 As per the facts that emanate from the record, the assessee was one of the joint owners having 50% share of an industrial property bearing No.327/6 at Mysore Road purchased on 20.10.2004. Proceedings for the acquisition of the said land was initiated by KIADB, purportedly from BMRCL (Bangalore Metro) and the assessee received compensation of ₹ 84,61,701 on acquisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above property would be ₹ 30,41,414 as given in the revised computation of LTCG (supra). The Assessing Officer is directed to allow the assessee exemption under section 54F of the Act accordingly. 6. Set off of Long Term Capital Loss (LTCL) on sale of securities : ₹ 3.22.314. 6.l In the Ground raised at S.No.5, the assessee contends that the Assessing Officer erred in disallowing the set off of LTCL of ₹ 3,22,314 incurred on sale of listed shares, against LTCG on sale of immovable property to BMRCL disregarding the provisions 70 of the Act. The learned Authorised Representative submits that the provisions of section 70(3) of the Act which deals with set off of loss from one source against the income from another source under the same head does not exclude the loss on sale of listed securities involving STT as contemplated under section 10(68) of the Act. Hence the LTCL on sale of listed securities is liable to be set off against LTCG on sale of immovable property. It is further submitted by the learned Authorised Representative that even sub-sections (1) and (3) of section 71 of the Act which deal with set off of losses does not exclude capital loss arising on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase is cited by the learned Authorised Representative, the ratio of the decision therein does not come to the rescue of the assessee. Following the reasoning of the co-ordinate bench of the Mumbai Tribunal in the case of G.K. Ramamurthy (supra), we are of the view that the set off of LTCL on sale of listed securities, whose income is exempt under section 10(38) of the Act, against LTCG immovable property/as claimed by the assessee, is contrary to law and the intention, object and purpose of the Legislation in introducing clause 10(38) of the Act. In this view of the matter, we reject ground No.5 raised by the assessee and confirm the orders of the authorities below. 8. Total income declared by assessee. 8.1 In the Ground raised at S.No.6, the assessee contends that the Assessing Officer erred in adopting the returned income at ₹ 27,98,530 as against ₹ 26,48,610 actually declared by the assessee in the return of income for Assessment Year 2009-10 filed on 21.9.2009. The learned Authorised Representative also submitted that though this matter was raised in the appeal before the CIT(Appeals) as ground No.5, the learned CIT (Appeals) failed to address this ground. 8.2 Both ..... 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