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TMI Blog2019 (2) TMI 1591X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the assessee does not fall under sub-section (1) of Section 71 of the Act since the assessee had declared capital gain. Such a situation would be covered by subsection (2) of Section 71 Provision of Sub-Section 2 of Section 71 was somewhat different and the expression “or, if the assessee so desires, shall be set off only against his income, if any, assessable under any head of income other than 'capital gains' has since been deleted. Nevertheless, the question that would arise is, whether even in the unamended form sub-section (2) of Section 71 of the Act mandates the assessee to set off its business loss against the capital gains of the same year when this provision used an expression “may” as compared to the expression “shall” ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving effect to the appellate order. After that, the A.O. noticed, which he thought was an apparent error, in the assessment of the assessee, with respect to the long term capital gain. He, therefore, after putting the assessee to notice, passed an order dated 29th March, 2012 rectifying his original order and reduced the carry forward of business loss. This was on the basis that, according to the A.O, during the period relevant to the A.Y. in question, the assessee had declared low tax capital gain. According to the A.O. in terms of Section 71(2) of the Income Tax Act, 1961 ( IT Act for short) the assessee was under compulsion to set off business loss against the capital gain. Only thereafter the remaining sum could be carried forward fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct since the assessee had declared capital gain. Such a situation would be covered by subsection (2) of Section 71 of the Act which reads as under; (2) 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 income assessable under the head Capital gains , such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessable for that assessment year under any head of income including the head Capital gains (whether relating to short-term capital assets or any other capital assets) 4. In case of British Insulated Calender's (supra) this Court had in respect to sub-section 2 of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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