Setting off of house property loss

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Querist : Anonymous

Querist : Anonymous (Querist)

16 February 2013 For a particular A.Y. an assessee incurred loss under the head House Property. The assessee has income under the head of PGBP and LTCG under Sec. 112 for that A.Y. On comparing, the assessee found that it was more beneficial for him to set off HP loss first against LTCG and he did the same while filing e-ROI (resulting in tax refund). Now, after the ROI being processed at CPC, he got the intimation u/s 143 in which he found that his tax refund has reduced. On analyzing, he found that HP loss has been set off against Business Income which resulted in reduction of his refund claim.

Based on above problem, I have following questions:

1) Is any order is prescribed for setting of HP loss against other heads?
2) If not, can assessee set off HP loss in a manner which is more beneficial to him?
3) What is the reason behind not setting off HP loss against LTCG?
4) If assessee's claim is correct, what can he do to get his full refund?

Please cite sections, case laws, circulars, etc. in support of your answer.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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16 February 2013 Please refer the link-

https://www.lexsite.com/services/network/caa/contro2.shtml
.
In my view-
1) No order is prescribed. Only restrictions can be said as prescribed.
2)Yes The assessee can set off at his option
and to the extent most beneficial to him
3) To Collect more revenue.
4) Assessee has to protest either by filing a rectification request or by filing an appeal.
.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2013 First of all, let me thank for your opinion and bringing clarity to this issue. Sir, I have gone through the link you provided and read the article. Although I could not find the circular cited in the article but I did find a circular(Circular : No. 721, dated 13-9-1995) which I wish that you go through and verify that no other circular is issued overriding it. I also request you, if possible, to cite some case laws in support of our stand as they can be strong grounds of appeal.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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18 February 2013 I appreciate your efforts and reverting back
for arriving at a solution. Still, it can be said that we have got a big thing. I shall be back with any supportive case law.
.

Querist : Anonymous

Querist : Anonymous (Querist)

19 February 2013 I also thank you for your support and willingness to solve the issue. I'll share my progress on this problem.

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