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TMI Blog2012 (2) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... f depreciable assets. 2. The ld CIT(A) ought not to have confirmed disallowance of the set off of business loss/unabsorbed depreciation against the deemed short term capital gain u/s.50 on sale of depreciable assets. 3. The set of f of business loss/unabsorbed depreciation loss against the deemed short term capital gain u/s.50 on sale of depreciable assets requires to be allowed. 3. The Assessee is a company. The AO noticed from the perusal of Prof it & Loss A/c. it is noticed that the assesee has credited ₹ 32,85,543/- on account of profit on sale of Assets. The said profit on sale of assets was adjusted against unabsorbed business loss and unabsorbed depreciation of earlier year. The AO was of the view that set off of unabsorbed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der one head has been adjusted against the income earned against any other heads of the same year. He was of the view that as per provision of section 70 of the Act, if the net result for any assessment year, in respect of any source under any head of income, is a loss, the assessee is entitled to have the amount of such loss set off against his income from any other sources under the same head of income for the same assessment year except the; (i) loss from speculation (ii) long term capital loss (iii) loss from race horses (iv) and loss cannot be set off against winning from lotteries, cross word puzzles etc. Since, in the case of the assessee there was no loss under any of the heads of its income during the year under considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year, the net result of the computation under the head "Profits and gains of business or profession" is loss to the assessee, not being 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 sec.71, so much of the loss as has not been so set off or .. where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and - (i) it shall be set off against the profits and gains, if any , of any business or profession carried on by him and assessable for that assessment year;…. Much stress has been laid by both the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther converted into stock-in-trade or is disposed off. The income earned by the assessee by carrying on the business by use of the stock in trade only is the business income of the assessee. Likewise, any expenditure incurred by the assessee for carrying on of business and for earning the income from such business or profession is only allowable as deduction. After taking into account the receipts and payments for carrying on the business of the assessee only the profit or gain or loss from the business is computed. If the profit or loss relate to the same assessment year from one source then it can be set off from another source under the same head of income u/s 70 Act, and it can be set off against the income from any other head of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isplaced its reliance upon the decision of the Apex Court in the cases of M/s United Commercial Bank Ltd., and M/s Cocanada Radhaswami Bank Ltd., In view of the same, we are inclined to reject the grounds of appeal nos.5 & 6 raised by the assessee. Thus, the reference is answered in favour of revenue." 8. In view of the aforesaid decision of the Special Bench, we are in the view that the ld CIT(A) was justi f ied in upholding the order of the AO rejecting the claim of the assessee for set of f of Short term capital gain against carried forward business loss /unabsorbed depreciation of earl ier years. We therefore conf irm the order of the CIT(A) and dismiss the appeal by the Assessee. 12. In the result, appeal of the assessee is dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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