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TMI Blog2017 (4) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that identical issue of set off of business loss against capital gains (whether STCG or LTCG) was considered by the Coordinate Bench in its order in the case of Sumaria Appliance Pvt. Ltd. [2014 (9) TMI 353 - ITAT MUMBAI ] and it was held that the assessee had no option to carry forward business loss to subsequent years without setting off of the same against capital gains arising during the year.- Decided against assessee. - ITA No. 7052/Mum/2014 - - - Dated:- 12-4-2017 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain, Judicial Member For The Appellant : Shri Ruturaj H. Gurjar For The Respondent : Shri Chandra Vijay ORDER Per Jason P. Boaz, A.M. This appeal by the assessee is directed against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the expenditures were regular revenue expenses and were wholly and exclusively for the purpose of the Appellant s business. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) 13 erred in holding that expenditure incurred on account of reimbursement of customers and consultants (being part of travelling expenditures) does not have nexus with business. Ld. CIT(A)-13 erred in not appreciating that the expenses were entirely deductible. 3. The learned CIT(A) -13 erred in holding that there is no option with the Appellant as regards setting off of business loss against capital gains. Ld. CIT(A) failed to appreciate that such an option is provided under s. 71(2) of the Act. 4. The Order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elling expenses paid as reimbursement to the customers and consultant. The assessee had debited an amount of ₹ 90,30,897/- as travelling expenditure and at the time assessment, the AO verified the travelling expenses and found that an amount of ₹ 5,53,470/- were relating to nonemployees. A notice was issued by the AO, but no plausible explanation was tendered by the assessee. Moreover it is incumbent upon the assessee to prove this fact that the said expenditure was incurred upon the employee or incurred for business purpose. Therefore, in such circumstances, the AO has rightly declined the said travelling expenses being not incurred upon the employees of the assessee firm, which has subsequently been confirmed by the learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 dated 11.06.2014 and it was held that the assessee had no option to carry forward business loss to subsequent years without setting off of the same against capital gains arising during the year. In this order, the Coordinate Bench has considered and decided the issue as under at paras 7 to 7.4 as under: - 7. Adverting to Ground No.2 3, it will be relevant to reproduce the relevant portion of section 71 sub-section (1) (2). 71. Set off of loss from one head against income from another.- (1) Where in respect of any assessment year the net result of the computation under any head of income, other than Capital gains , is a loss and the assessee has no income under the head Capital gains , he shall, subject to the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business loss separately despite there being income under the head capital gain. Section 71(2) contemplates a situation where in respect of any assessment year, the net result of computation under any head of income , other than capital gain is a loss and assessee has income assessable under the head capital gains , in such situation, such loss may, subject to provision of Chapter VI (section 66 to 80), be set off, for and from assessment year 1992-93, against assessee s income, if any, assessable for that assessment year under any head of income including the head capital gains (whether relating to short term capital gain asset or any other capital asset). Thus, provisions of section 71(2) cannot be construed to give option to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off of the same to capital gain arising during the year. The language of section is very clear and no such option has been given to the assessee. 7.4 In view of above discussion, we dismiss ground No.2 3 of the assessee. 5.2.2 Following the above cited order of the Coordinate Bench in the case of Surmaria Appliance Pvt. Ltd. in ITA No. 2712/Mum/2012 dated 11.06.2014, we hold that in view of the provisions of section 71(2) of the Act, the assessee had no option to carry forward the business loss to subsequent years without setting off the same against capital gains (i.e. in this case LTCG of ₹ 17,04,000/-) arising during the year. Finding no merit in this ground and contentions raised by the assessee, we dismiss ground No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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