2012 (8) TMI 1188

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....sses against the STCG, computed as per section 50 of the I.T. Act, 1961 in view of provisions of section 72 of the I.T. Act 1961. 2. On the facts and in the circumstances of the case and in law, the learned CIT (A) is justified in holding that unclaimed unsecured loans should be assessed as business income instead of "Income from other sources". 2. Briefly stated, assessee is a wholesale distributor of pharmaceutical goods. The return of income was filed disclosing income of ₹ .12,30,400/-, whereas the income was assessed at ₹ .76,36,740/-. Assessee sold its business asset a shop for a consideration of ₹ .46.00 lakhs and after arriving at the capital gain under section 50. Assessee claimed set off of brought forward bus....

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....AO to treat the amounts returned back as income from profit and gains of business or profession. The Revenue is aggrieved. 4. We have heard the learned DR and the learned Counsel in detail. 5. As far as Ground No.1 is concerned, the issue is decided by the Coordinate Bench in the case of Digital Electronics Ltd vs. Addl. CIT (supra) as under wherein it was held that "Section 72 inter alia provides that "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 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 ....

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....of any business or profession carried on by assessee and assessable to tax for that assessment year", the same can be set off against loss under the head profits and gains of business or profession carried forward from earlier years. The income earned in the relevant year although not taxable as "profits and gains from business or profession" was an income in the nature of income of business nevertheless. Assessee was, therefore, indeed justified in claiming the set off of business losses against the income of capital gains assessable under s. 50". 6. Respectfully following, we do not see any reason to interfere with the order of the CIT (A) as he has followed the above Coordinate Bench decision and directed AO to allow set off of business....