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TMI Blog2022 (4) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961 2. On the fact and circumstances of the case the Ld. CIT(A) erred in deleting the disallowance u/s 14A for A.Y. 2012-13 without appreciating the fact that circular no. 5 of 2014 dated 11th February, 2014, issued by the Central Board of Direct Taxes Clearly provides for disallowance of the expenditure even where taxpayer in particular year has not earned any exempt income." 03. Brief facts of the case shows that assessee is an individual engaged in the business of promoters and builders, Filed her return of income on 31st July, 2012 at Rs. 31,33,218/-, which was assessed under section 143(3) of the income-tax Act, 1961 (the Act) on 26th March, 2015, where an addition of Rs. 2,99,94,793/- was made on account of set off of brought forward loss of Assessment Year 2011-12 and thereby the total income was assessed at Rs. 3,31,28,011/-. 04. Subsequently, search under section 132 of the Act was conducted on 21st July 2017 and consequently notice under section 153A of the Act was issued to the assessee on 4th September, 2018. Consequently assessment order under section 153A read with section 143(3) of the Act was passed on 22nd May, 2019 determining the total income of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the learned CIT - A, on merits of the case has allowed the claim of the appellant for set off of Long term capital gain of Rs. 2 99,94,793/- on sale of flat against the brought forward long-term capital loss of Rs. 2 67,51,997/- for assessment year 2011 - 12 on sale of shares on which STT is paid. The learned CIT - A followed decision of Pune bench of ITAT in assessee's own case for assessment year 2012 - 13 and 2013 - 14 dated 25/11/2019, wherein Pune bench relied on the decision of the coordinate bench in case of Raptakosh Brett & co Limited in ITA number 3317/2009 dated 10/6/2015. Now in view of the decision of honourable Kerala High Court in case of Apollo tyres Ltd versus Deputy Commissioner Of Income Tax (2021) 130 taxmann.com 295/[2022] 284 taxmann 229, the order of the learned CIT - A is not sustainable. 011. However we find that learned assessing officer has repeated the disallowance made in the original assessment order, we find that the ground taken by the Revenue describing the loss of Rs. 2,99,94,793/- is in fact short term capital loss. However, for the reason that disallowance is repeated in 153A order, which was already part of 143(3) proceedings could not hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the learned CIT (A), who allowed the claim of the assessee. Thus, the set off of long term capital gain of Rs. 6,12,93,609/- was set off against the long term capital loss of Rs. 81,20,956/- on account of loss arising in sale of shares on which STT is paid and short term capital loss of Rs. 5,31,72,653/- brought forward from Assessment Year 2010-11. Therefore, the learned Assessing Officer is aggrieved and preferred this appeal. 017. The disallowance under section 14A was restricted to exempt income and expenditure made. Thus, disallowance under section 14A of the Act was restricted to Rs. 3,81,968/-. This was challenged as per ground no.2. 018. The learned Departmental Representative firstly submitted that Revenue is aggrieved by the action of the learned CIT (A) in allowing set off of long term capital loss incurred by the assessee on sale of STT paid shares of Rs. 81,20,956/-, income from which is exempt under section 10(38) of the Act allowed to be set off against the capital gain earned by the assessee during the year. He submitted that the gain arising to the assessee on sale of shares on which securities transaction tax is paid is exempt under section 10(38) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing assessee's claim of set off Long Term Capital Gain on Rs. 5,67,45,907/- on immovable property against brought forward Long Term Capital Loss arising from sale of shares, income which do not form part of total income as envisaged in the provisions of section 10(38) of the Income Tax Act, 1961." 023. The assessee filed return of income on 4th August, 2017 at Rs. 17,30,74,660/-. The return was processed under section 143(1) of the Act. Search was conducted under section 132 of the Act on 21st July, 2017. Notice under section 153A of the Act was issued on 4th September, 2018. The assessment order was passed on 22nd May, 2019 determining the total income of the assessee at Rs. 23,01,60,560/-. The learned Assessing Officer disallowed the brought forward loss of Rs. 5,67,45,907/-. During the year assessee has earned long term capital gain of Rs. 21,77,41,908/-. The assessee has carried forward short term capital loss from Assessment Year 2010-11 of Rs. 5,67,45,907/-. Therefore, this short-term capital loss was set off against long term capital gain earned during the year. The learned Assessing Officer disallowed the same holding that in the earlier assessment year such disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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