9911796707
TMI Blog1981 (1) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... preceding assessment year 1976-77. During the accounting year ended 30-6-1976, relevant to the assessment year 1977-78, under present appeal, the assessee sold the assets and derived profit of Rs. 6,185. The ITO assessed it as income under section 41(2), under the head "Profits and gains of business or profession" for the reasons discussed in the appellate order for the assessment year 1976-77. The ITO did not set off the loss brought forward from the earlier years against the above income, no reasons being assigned in the assessment order for this denial. The assessee contended before the Commissioner (Appeals) that the carried forward business loss for the earlier years should be set off against the profit under section 41(2). The Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the moneys payable in respect of the building machinery, plant or furniture referred to in this sub-section become due in a previous year in which the business or profession for the purpose of which the building, machinery, plant or furniture was being used is no longer in existence, the provisions of this sub-section shall apply as if the business or profession is in existence in that previous year." "72(1) Where for any assessment year, the net result of the computation under the head 'Profits and gains of business or profession' is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-77, in which the business ceased, there was only positive income and no loss. In the present case, the assessee had sold the assets of the business and the profit under section 41(2) is assessed as the income of the business only by virtue of the Explanation to section 41(2) which enjoins that the provisions of section 41(2) shall apply as if the business is in existence in the accounting year in which the sale took place. Thus the presumption of the business being in existence is only for the limited purpose of applying section 41(2) and cannot be extended to section 72(1), which requires that the business should have been actually carried on by the assessee. In the above view of the matter, we disagree with the Commissioner (Appeals) an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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