Revenue appeal dismissed; carried-forward long-term capital loss set off against long-term gains under section 74 upheld

The Revenue's appeal was dismissed by the HC. AO and CIT(A) had disallowed the assessee's claim to set off carried-forward long-term capital loss against long-term capital gains, but the Tribunal allowed the set-off under s.74, following its earlier decision. The Revenue's challenge to that Tribunal view was not entertained in a related appeal, and relying on that precedent the HC refused to entertain the proposed reframed question of law and dismissed the appeal, with no order as to costs.

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Issues involved: Appeal by Revenue for assessment year 2006-07 regarding set off of long term capital loss against short term capital gain u/s Income-tax Act, 1961.

Details of the judgment:

1. The respondent-assessee sold its office premises and secured long term capital gains. The Assessing Officer disallowed the claim of the respondent-assessee to set off its carry forward long term capital loss against the long term capital gains made u/s Section 74 of the Act in view of Section 50 of the Act. The Commissioner of Income Tax (A) upheld the order of the Assessing Officer.

2. The Tribunal allowed the claim of the respondent-assessee to set off its long term capital loss u/s Section 74 of the Act, following its decision in the matter of Manali Investments v. Asstt. CIT [2011] 45 SOT 128 (URO)/10 taxmann.com 293 (Mum.). The Revenue appealed against the Tribunal's order in the matter of Manali Investments to the High Court in Income Tax Appeal No.1658 of 2012, which was refused to be entertained by the High Court.

3. The High Court, based on its order in Income Tax Appeal No.1658 of 2012 regarding Manali Investments, dismissed the appeal by the Revenue for assessment year 2006-07. The proposed reframed question of law was not entertained, and the appeal was dismissed with no order as to costs.

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