Appellant wins appeal for set-off of losses against gains; deduction claim dismissed.

The Tribunal allowed the appellant's appeal, directing the Assessing Officer to permit the set off of brought forward business losses and unabsorbed depreciation against short term capital gains. However, the claim for deduction under section 80G of the Income Tax Act was dismissed as it was not pressed during the hearing.

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Issues:
1. Set off of brought forward Business Loss against Short Term Capital Gains
2. Set off of brought forward Unabsorbed Depreciation against Short Term Capital Gains
3. Deduction u/s 80G of the Income Tax Act

Analysis:

Issue 1: Set off of brought forward Business Loss against Short Term Capital Gains
The appellant, a company engaged in various businesses, filed its return of income declaring total income. The Assessing Officer (A.O.) disallowed the claim for set off of brought forward business losses against short term capital gain on the grounds that the income was chargeable to tax as short term capital gain u/s 50 of the Income Tax Act. The ld. CIT(A) upheld the A.O.'s decision. However, the Tribunal referred to a previous case and held that as per Section 72 of the Act, the loss carried forward can be set off against profits of any business or profession assessable for that year. The Tribunal emphasized that the gains against which the loss is set off need not be taxable under the head 'Profits and gains of business or profession' as long as they are of any business or profession carried on by the assessee. Therefore, the Tribunal allowed the claim for set off of brought forward business losses against the deemed short term capital gain.

Issue 2: Set off of brought forward Unabsorbed Depreciation against Short Term Capital Gains
The Tribunal considered the appellant's claim for set off of brought forward unabsorbed depreciation against short term capital gains. Referring to a decision of the Hon'ble Gujarat High Court, the Tribunal explained the treatment of unabsorbed depreciation under Section 32(2) of the Act. The High Court clarified that there was no restriction on the carry forward and set off of unabsorbed depreciation, allowing it to be set off against profits and gains of subsequent years without any limit. Following this decision, the Tribunal decided in favor of the appellant and allowed the set off of brought forward unabsorbed depreciation against short term capital gains.

Issue 3: Deduction u/s 80G of the Income Tax Act
The appellant's alternate claim for deduction u/s 80G of the Act was not pressed by the appellant's counsel during the hearing. Consequently, the Tribunal treated this ground as not pressed and dismissed the claim.

In conclusion, the Tribunal partly allowed the appeal of the assessee based on the above analysis, directing the A.O. to allow the set off of brought forward business losses and unabsorbed depreciation against the short term capital gains. The claim for deduction u/s 80G was dismissed as not pressed.

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