TaxTMI 
TaxTMI 
2016 (7) TMI 335
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....me of Rs. 49,09,660/-. The assessee filed revised return of income on 29-03-2010 declaring total income of Rs. 57,39,126/-. The case of the assessee was selected for scrutiny under CASS and accordingly notice u/s. 143(2) was issued to the assessee on 18-08-2010. During the period relevant to the impugned assessment year, the assessee had sold plant and machinery of the discontinued business and earned profit of Rs. 95,61,163/-. The assessee treated the aforesaid surplus as short term capital gain in terms of section 50 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). The assessee had suffered business loss in the earlier assessment years. The assessee claimed that the surplus arising from sale of capital asset is in the n....
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....supported the findings of Commissioner of Income Tax (Appeals) in rejecting the claim of assessee with respect to set off of brought forward business loss of Rs. 38,67,378/- against the short term capital gains arising out of sale of plant and machinery. The ld. DR submitted that the issue raised in the appeal is squarely covered against the assessee by the Special Bench decision of the Tribunal in the case of Nandi Steels Ltd. Vs. Assistant Commissioner of Income Tax reported as 134 ITD 73 (Bang.)(SB) : 17 taxmann.com 93 (Bang.)(SB). The ld. DR contended that the ld. AR of the assessee has not been able to controvert the findings of Special Bench decision of the Tribunal and/or distinguish the same. The ld. DR prayed for dismissing the app....
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....on the said decision. 5. General 5.1 The appellant craves leave to add, amend, alter or delete anyone or more of the grounds of appeals as may be required in the nature and circumstances of the case. 5.2 The appellant prays leave to adduce such further evidence to substantiate its case as the occasion may demand." The assessee has also raised following additional grounds : "1. The learned CIT(A) erred in not allowing the set off of unabsorbed depreciation of Rs. 8,90,945/- brought forward from the earlier years against the Short Term Capital Gains taxable u/s 50 and interest income offered to tax in this year. 2. The learned CIT(A) erred in not allowing the set off of brought forward business loss pertaining to the earlier years ....
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....ecial Bench of the Tribunal in the case of Nandi Steels Ltd. Vs. Assistant Commissioner of Income Tax (supra) while adjudicating the issue held as under : "10. Having heard both the parties and having considered the rival contentions and the material on record, we find that the only question before us for consideration is whether the brought forward loss from the earlier years can be set off against the income from "capital gains" u/s 72 of the IT Act. For the purpose of ready reference, the relevant portion of sec.72 is reproduced here under : "72 (1) Where for any assessment year, the net result of the computation under the head "Profits and gains of business or profession" is loss to the assessee, not being loss sustained in a specul....
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....d on by the assessee and therefore, are business assets and any gains from the sale of such assets would also have the character of business income. We are unable to agree with this contention of the assessee that the assets sold by the assessee were business assets. Undisputedly, they were capital assets and the capital receipts are not taxable nor are the capital payments deductible from the income of the assessee. The capital is to be used for the purpose of carrying on the business of the assessee and it shall remain in the business of the assessee till it is either converted into stock-in-trade or is disposed off. The income earned by the assessee by carrying on the business by use of the stock in trade only is the business income of t....