Section 54F Relief Not Be Diluted By LTCL Set-off Under Section 70

BACKGROUND OF THE CASE

• The Assessee¹ an individual, filed a return for AY 2022-23 declaring total income of about INR 49.54 Lakhs. During the year, he earned Long-Term Capital Gain (‘LTCG’) of about INR 69.84 lakh from sale of equity shares and claimed exemption under section 54F of the Income-tax Act, 1961 (‘the Act’). He also incurred Long-Term Capital Loss (‘LTCL’) of about INR 37.72 Lacs on sale of other equity shares and carried it forward in the return.
• The Centralized Processing Centre (‘CPC’), while processing the return u/s 143(1) of the Act, did not allow the carry-forward of LTCL to subsequent years.
• Aggrieved with the order of CPC, the Assessee preferred an appeal before CIT (Appeals) [‘CIT(A)’].