2018 (12) TMI 312

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....here is an option to the assessee to set off the business losses against the capital gains or is it mandatory to do so. 3. The brief facts of the case are that during the year under consideration, the assessee had business loss of Rs. 3,04,56,921/-, whereas, the assessee had earned short term capital gains of Rs. 8,80,902/-. The assessee in the return of income did not set off the business loss against the short term capital gain. However, after adjusting the capital gains of the year against the brought forward short term capital loss of Rs. 4,86,524/- and claiming deduction u/s 80 at Rs. 3,94,378/- returned the taxable income at 'nil' with carry forward business loss of Rs. 2,91,52,776/-. However, the lower authorities have adjusted the ....

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....the earlier section with effect from 1 April,1962. "71. Set off of loss from one head against income from another - (1 ) 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 no income under the head "Capital gains", he shall, subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income, if any, assessable for the assessment year under any other head. (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, sub....

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.... loss from one head against income from another - Where in respect of any assessment year, the net result of the computation under any head of income, is a loss, the assessee shall subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income, if any, assessable for the assessment year under any other head. Carry forward and set off business losses. 72. (1) Where for any assessment year, the net result of the computation under the head "Profits and gains of business or profession" is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of....

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.... 5. The provisions of section 72 are also relevant, which for the sake of convenience are also reproduced below:- Carry forward and set off of business losses. 72. (1) Where for any assessment year, the net result of the computation under the head "Profits and gains of business or profession" is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so set off or, where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and- (i)....