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Tax Publishers
Naresh Jain v. ACIT [ITA No. 159/JP/2019, dt.
11-8-2020] : 2020 TaxPub(DT) 3190 (Jp.-Trib.)
Capital gains computation vs. Intra head adjustments
Facts:
Assessee sold a long-term asset, i.e., a commercial
property and reinvested the same in a residential property thereby availing
section 54F benefit. Separately he had also returned long-term losses due to
sale of shares for Rs. 14,76,730. In the computation of income assessee first
claimed the reinvestment benefit under section 54F and then claimed carry forward
of long-term loss of shares for Rs. 14,76,730. The assessing officer first
deducted the loss of shares from the capital gains and then gave the
reinvestment benefit of section 54F which was upheld by the first appellate
authority thereby disallowing the carry forward losses on the shares. On higher
appeal by the assessee --
Held in favour of the assessee that the intra head under
section 70 is possible only after computing the capital gains under section 45
to section 55 and thus the computation of assessee was correct.
Relief under section 54F precedes intra head adjustment.
The workings of the assessing officer and the assessee are
tabulated as under to enable better understanding of the decision --
Description
|
Amount
(in Rs.)
|
Assessee
|
ITO
|
Long term capital gain :
|
|
|
Sale consideration of
commercial property
|
14,000,000
|
14,000,000
|
Less :
|
|
|
Indexed cost of acquisition
|
(3,674,643)
|
(3,674,643)
|
Expenses in relation to
transfer
|
(24,165)
|
(24,165)
|
Net long-term capital gain
|
10,301,192
|
10,301,192
|
Loss on sale of share
|
|
(1,476,730)
|
Net Capital gain
|
|
8,824,462
|
Less: Reinvestment benefit under section 54F
|
(10,301,192)
|
(8,824,462)
|
Taxable Capital gains from
property
|
--
|
--
|
Loss on sale of shares
|
(1,476,730)
|
--
|
Claimed as carry forward
|
(1,476,730)
|
--
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