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TMI Blog2017 (5) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... rd losses are eligible for set-off against short term capital gain on sale of office premises - decision of CIT(A) upheld. Allowance of expenses - professional fees, ROC, Audit fees and Tax Audit fees - Whether the Ld. CIT(A) was correct in allowing expenses of professional fees, ROC, Audit fees and Tax Audit fees of ₹ 1,18,772/- against income from other sources even though there was no business activity during the year and ROC expenses claimed pertains to prior period? - Held that: - the CIT(A) has noted that the impugned expenses are statutorily required to be incurred and, therefore, the same was allowable. In our considered opinion, the CIT(A) made no mistake in allowing the claim of the assessee because even in the absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys that the order of the CIT(A) on the above grounds be set aside and that of the Assessing officer resorted. 3. In so far as the first Ground of appeal is concerned, the relevant facts are that the respondent assessee was engaged in the business of travel agency, which had since been closed down w.e.f. August, 2007 and during the year under consideration no business activity was carried out. In the return of income, assessee had declared profit on sale of office premises amounting to ₹ 48,91,949/- against which, assessee claimed set-off of brought forward business losses of assessment years 2006-07,2007-08 and 2009-10 amounting to ₹ 31,01,347/-. The Assessing Officer denied the aforesaid set-off primarily on the ground tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal before us. 4. Before us, the Ld. Departmental Representative reiterated the stand of the Assessing Officer that on account of section 50 of the Act, gain arising on transfer of a depreciable asset was deemed to be short term capital gain and, therefore, in terms of section 72 of the Act brought forward business losses could not be set-off against the short term capital gain earned on sale of office premises. 5. On the other hand, the Ld. Representative for the assessee has defended the order of the CIT(A) and pointed out that the decision of the Tribunal in the case of Digital Electronics Ltd. (supra) relied upon by the CIT(A) has impliedly been approved by the Hon'ble Bombay High Court in the decision rendered in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial sense, the gain on sale of office premises represents profits of business. The said proposition was applied by our Co-ordinate Bench in the case of Digital Electronics Ltd. (supra), which has since been followed by the CIT(A) in the present case. The Hon'ble Bombay High Court in the case of M/s. Hickson Dadajee Pvt. Ltd(supra) was considering the appeal of the Revenue, inter-alia, on the following question of law:- (i)Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing set off of brought forward business loss against deemed short term capital gains arising from sale of building and plant and machinery? The Hon'ble Bombay High Court approved the stand of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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