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TMI Blog1985 (5) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. The assessee is a company which was formerly doing business in coal mining. This business was stopped as it was nationalised with effect from 1-5-1972. During the year under consideration, the assessee was receiving interest on the compensation amount receivable by it. On the other hand, it was paying interest on the overdraft amounts. The resultant figure was being shown as income or loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Evidently, the said loss was not under the head 'Capital gains'. 3. Subsequently, the Commissioner scrutinised the records and came to hold the view that the profit under section 41(1) could be set off only against the loss under section 41(5). As the ITO had not applied his mind to this aspect of the question, he proposed to set aside the assessment under section 263 of the Act. The assessee co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts therein have been well taken and so the order deserved to be upheld. 5. We have considered the contentions of both the parties as well as the facts on record. We find that section 70(1) entitles the assessee to set off the loss under one head against the income under any other head of the same year so long as the loss did not relate to capital gains or speculation business. In the instant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im this additional advantage available to it under section 41(5). Had the assessee any business loss in the year in which it stopped its business then the same would have gone to reduce the income assessed by the ITO still further. Due to the alleged absence of enquiry by the ITO on this point, the mistake, if any, has resulted in a benefit to the revenue and not in any prejudice to the revenue. H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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