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TMI Blog2017 (8) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... .O. that the appellant has claimed set off of brought forward business loss, is not correct. It is also clear that the assessee has set off the unabsorbed depreciation, against short term capital gain in terms of section 32(2) r.w.s. 72(2) of the Act. In these facts and circumstances, the findings of the A.O. regarding set off of brought forward business loss, was not correct, hence, the claim of the assessee of brought forward depreciation against short term capital gain, is correct and accordingly, findings of the A.O., are erroneous, therefore, disallowance was rightly deleted and after set off of brought forward depreciation total income will be at NIL, as claimed by the assessee in the return of income, which does not need any interfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s. 142(1) of the Act was issued on 28.7.2014 which was duly served on the assessee company. In response to the same, the AR of the assessee appeared from time to time and furnished the written reply. The assessee is engaged in the business of civil construction or infrastructure development work and construction works of every description. The examination of details submitted by the assessee reveals that during the year under consideration no business activity as stated is carried out. The assessee has shown only WIP on which there is no change during the year. The WIP is related to work performed for Punjab Government Undertaking which is not recognized by the contractee and dispute is pending for last some years. AO observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e original grounds of appeal filed by the Revenue. I find that the Ld. CIT(A) has elaborately discussed the issue in para no. 4.4 page no. 6 7 of the impugned order. For the sake of convenience, the relevant paragraphs are reproduced as under:- I have carefully considered the assessment order, written submissions, case law relied upon and oral arguments of the Ld.AR. The objection/argument of the appellant are discussed as under:- ( i) In the assessment order, the A.O. has stated that the assessee has sold the assets from block of plant and machinery for ₹ 1,04,71,296/- and the WDV as on 01.4.2011 of such block was ₹ 41,25,627/-. Accordingly, assessee has shown short term capital gain of ₹ 63,45,669/- (Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he extent of short term capital gain of ₹ 31,35,606/-, was set off in terms of section 32(2) of the Act and therefore, total income was determined at NIL. It is further submitted by the AR that the same is also disclosed in the computation of income filed along with return of income. It was further submitted by the appellant that unabsorbed depreciation can be set off from income under any head, except against salary income and therefore, the appellant has claimed the set off of depreciation from short term capital gain. However, the A.O. has wrongly understood the claim of set off of unabsorbed depreciation by the appellant, as set off of brought forward business loss and therefore, disallowed the claim. In these facts, it is submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s declared at NIL by the assessee. The A.O. has also stated that the gain arising from sale of depreciable asset, is a short term capital gain as per provision of section 50 of the Act and therefore, set off of brought forward business loss against the short term capital gain, is not allowable. However, in the assessment proceedings, assessee has submitted that the plant and machinery was always used for business purposes and the depreciation has been claimed by the assessee in the preceding years, which was allowed. However, the A.O. was of the view that as per provision of section 72 of the Act, brought forward business loss can be set off only against business profit of the current year and not against income from any other source, inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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