ITAT allows long-term capital loss resulting from the sale of government securities after application of the cost inflation index
The Income Tax Appeals Tribunal (ITAT), Kolkata Bench, allowed the long-term capital loss resulting from the sale of government securities after applying the cost inflation index.
The assessed company, Peerless General Finance & Investment Company Limited in this case, is a non-bank finance company.
The question relating to the appraiser’s claim for long-term capital loss arising from the sale of government securities by applying the cost inflation index was rejected by the valuation officer in the appraisal. carried out under section 143 (3).
However, the compensation for such a loss in the measure of Rs.86,39,024 / – and Rs 1,13,02,064 / – being respectively the long-term capital gain of the bonds and the right to property as claimed by the appraised has been authorized. by the Assessing Officer and taking into account this error allegedly made by the Assessing Officer, Prof. The CIT exercising his power conferred on him by virtue of Article 263 revised or annulled the order of the Assessing Officer rendered under Article 143 (3) on this issue.
The Ministry alleged that the fact of having issued the CIT (A) appeal order ruling on the appraisee’s appeal against the assessor’s order under section 143 (3) was not made known to the main CIT by the assessed person during a Section 263 proceeding and the same was intentionally deleted by the assessed person.
The coram of AT Varkey and PM Jagtap ruled that the appraiser’s claim for long-term capital loss resulting from the sale of government securities after application of the cost inflation index had already been authorized by the ld. CIT (A), there was no error in the order of the Assessing Officer in allowing compensation for such a loss with the Long Term Capital Gain arising from the Bonds and the Property Law.
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