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 --