Case Law Details
Shri Naresh Jain Vs ACIT (ITAT Jaipur)
The issue under consideration is whether it is lawful to first compute capital gain after doing intra head adjustments and whether the deductions u/s 54F should be allowed from the net income computed after intra head adjustments?
ITAT states that as per provisions of section 54F (1) on fulfilment of certain conditions the capital gain arose on sales of such assets will not be chargeable to capital gain under the section 45 of the Act. The scheme of Sections 45 to 55A provide for the computation of capital gains, and the effect has to be given first to the provision of capital gains as given under the above scheme and then apply the provisions of Section 70. Section 70 would come into play only when the capital gains have been computed in accordance with the provisions contained in Sections 45 to 55A. Thus, if, after work out of deduction u/s 54F if the capital gain arose on sale of certain assets is not chargeable to capital gain than the loss arose to assessee on sales of another assets cannot set off from gain of such assets. It is not necessary that one should first apply Section 70(3) and thereafter only, the assessee could invest the capital gain arising from the long term capital asset. In view of the above discussions, ITAT set aside the orders of lower authorities and direct the AO to compute the capital gain from sale of commercial property by not doing intra-head adjustment for the loss suffered from sale of shares and allow to carry forward the long term capital loss for the current year on sale of shares. In the result, the appeal of the assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the assessee against the order of ld. CIT(A), Alwar dated 18.12.2018 for the A.Y. 2015-16, in the matter of order passed by the A.O. 143(3) of the Income Tax Act, 1961 (in short, the Act). The ground taken by the assessee reads as under.
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