The Income Tax Appellate Tribunal (ITAT), Kolkata Bench allowed the Long-Term Capital Loss arising from the sale of Government Securities after applying the Cost Inflation Index.
The assessee, Peerless General Finance & Investment Company Limited in the present case is a Non-Banking Finance Company.
The issue relating to the assessee’s claim for Long-Term Capital Loss arising from the sale of Government Securities by applying the Cost Inflation Index was disallowed by the Assessing Officer in the assessment completed under section 143(3).
However, the set off of such loss to the extent of Rs.86,39,024/- and Rs.1,13,02,064/- being the Long-Term Capital Gain from Bonds and Right to property respectively as claimed by the assessee was allowed by the Assessing Officer and keeping in view this error allegedly committed by the Assessing Officer, the Pr. CIT exercising his power conferred upon him under section 263 revised or set aside the order of the Assessing Officer passed under section 143(3) on this issue.
The department has alleged that the fact of having passed the appellate order by the CIT(A) disposing of the appeal of the assessee filed against the order of the Assessing Officer under section 143(3) was not brought to the notice of the Principal CIT by the assessee during the course of proceedings under section 263 and the same was intentionally suppressed by the assessee.
The coram of A.T. Varkey and P.M. Jagtap ruled that the claim of the assessee for Long-Term Capital Loss arising from the sale of Government Securities after applying the Cost Inflation Index having been already allowed by the ld. CIT(A), there was no error in the order of the Assessing Officer in allowing the set-off of such loss against the Long-Term Capital Gain arising from the Bonds and Right to Property.
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