TaxTMI 
TaxTMI 
2021 (3) TMI 737
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.... Tribunal was justified in law in not holding that the income arising out of sale of business assets has the character of business income, and consequently the income though assessed as capital gain is entitled to set off against the carry forward business loss on the facts and circumstances of the case? (iii) Whether the Tribunal was justified in law in holding that the notice issued under section 148 of the Act, was based on the sufficient and relevant reasons and further the assumption of jurisdiction by the Assessing Officer was in accordance with law on the facts and circumstances of the case? (iv) Whether the Tribunal was justified in law in not serving the copy of the Tribunal order dated 11.12.2008 as referred in the Tribunal order dated 19.02.2011 in respect of disposal of grounds with regard to issues on Section 148 of the Act on the facts and circumstances of the case?". 2. Facts leading to filing of this appeal briefly stated are that the assessee is a limited company carrying on the business of manufacture of iron and steel. The assessee filed the return of income for the Assessment Year 2003-04 on 14.10.2003 and declared an income of Rs. 98,27,270/- under the ....
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....rejected the grounds raised by the assessee in respect of set off of brought forward business loss and answered the issues in favour of the revenue. The tribunal by an order dated 19.01.2012 in the light of order passed by the special bench dismissed the appeal preferred by the assessee. In the aforesaid factual background, the assessee has filed this appeal. 5. Learned Senior counsel for the assessee submitted that the proceedings under Section 148 of the Act are bad in law inasmuch as the same proposes to re-assess the income when no assessment has taken place. In this connection, our attention has been invited to paragraph 3 of the order dated 19.01.2012 passed by the tribunal wherein the tribunal has recorded a finding that no assessment has been done under Section 143(3) of the Act. It is further submitted that when the assessment itself was not done under Section 143(3) of the Act, the question of re-assessing the income of the assessee as per the Assessing Officer vide reasons recorded and any errors in reasons recorded is fatal to the assessment and therefore, the entire proceeding is bad in law. It is also urged that the Assessing Officer did not dispose of the objections....
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....ged that the appellant has brought forward the losses in accordance with the decisions of the Supreme Court in CIT VS. CHUGANDAS AND CO.', supra and 'CIT VS. COCANADA RADHASWAMI BANK LTD' supra. It is also pointed out that the order passed by the tribunal cannot be considered as an order passed under Section 254(1) of the Act nor the same can be construed as an order passed on an application under Section 254(2) of the Act. In support of the aforesaid submissions, reliance has been placed on decisions in 'CIT & ANR. VS. B.N.KESHAV', ITA NO.21/2003 DATED 03.04.2008 (KAR), 'PARASHURAM POTTERY WORKS CO. LTD. VS. ITO 106 ITR 1 (SC), CIT VS. CHUGANDAS AND CO.', 55 ITR 17 (SC), 'CIT VS. COCANADA RADHASWAMI BANK LTD', 57 ITR 306 (SC) and 'CIT VS. VIKRAM COTTON MILLS LTD.', (1988) 169 ITR 597 and LETTER DATED 17.08.2020. 7. On the other hand, learned counsel for the revenue submitted that undisputedly the assets sold by the assessee is capital asset and consideration has been offered to tax under the head 'capital gains' therefore, the question of treating the consideration from transfer of a capital asset as business income does not ari....
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....the case of the assessee is not of stock in trade but the assets of the assessee are fixed assets and not in stock in trade, therefore, the reliance placed on the decision of the Supreme Court in COCANADA RADHASWAMI BANK LTD. SUPRA has no application to the facts of the case. 9. We have considered the submissions made by learned counsel for the parties and have perused the record. Before proceeding further, it is apposite to take note of relevant provisions of Section 14, 28, 41(2), 45(1), 56(1), 72 and 74(1) of the Act, which read as under: 14. Heads of income Save as otherwise provided by this Act, all income shall, for the purposes of charge of income- tax and computation of total income, be classified under the following heads of income:- A.- Salaries. B.-] C.- Income from house property. D.- Profits and gains of business or profession. E.- Capital gains. F.- Income from other sources. A.- Salaries. 28. Profits and gains of business or profession 1 The following income shall be chargeable to income- tax under the head" Profits and gains of business or profession",- (i) the profits and gains of any business or profession which was carried on by t....
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....ubject to the other provisions of this Chapter, be carried forward to the following assessment year, and- (i) it shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year: Provided that the business or profession for which the loss was originally computed continued to be carried on by him in the previous year relevant for that assessment year; and (ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on: Provided that where the whole or any part of such loss is sustained in any such business as is referred to in section 33B which is discontinued in the circumstances specified in that section, and, thereafter, at any time before the expiry of the period of three years referred to in that section, such business is re- established, reconstructed or revived by the assessee, so much of the loss as is attributable to such business shall be carried forward to the assessment year relevant to the previous year in which the business is so re- established, reconstructed or revived, and-- (a) it shall be set of....
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....4.2000. Therefore, for the Assessment Year in question i.e., 2003-04, the assessee was not required to have carried on the business for the purposes of set off of brought forward business. It is well settled rule of statutory interpretation that intention of statute has to be gathered from the language employed by the legislature which means attention has to be paid to what has been said and what has not been said [See: 'CIT vs. TARA AGENCIES', (2007) 292 ITR 444 (SC)]. In 'GVK INDUSTRIES LTD. Vs. ITO', (2011) 332 ITR 130 (SC), the Supreme Court dealt with the legal maxim expression unius est exclusion alterius and held that express mention of one thing implies the exclusion of another. Section 72(1) of the Act employs the expression computation 'under the head profits and gains or profession', whereas, Section 72(1)(i) does not use the expression under the head. Thus, the legislature has consciously left it open that any income from business though classified under any other head can still be entitled to the benefit of set off. 12. The special bench of the tribunal relied on the decision of Supreme Court in CIT VS. EXPRESS NEWSPAPERS supra and held that th....
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....y this court in Commissioner of Income Tax vs. Chugandas & Co. Therein this court held that interest from securities formed part of the assessee's business income of the purpose exemption under Section 25(3). Sjaj J., speaking for the court, observed" "The heads described in Section 6 and further elaborated for the purpose of computation of income in Sections 7 to 10 and 12, 12A, 12AA and 12B are intended merely to indicate the class of income: the heads do not exhaustively delimit sources from which income arises. This is made clear in the judgment of this court in United Commercial Bank Ltd's case, that business income is broke up under different heads only for the purpose of computation of the total income : by that break up the income does not cease to be the income of the business, the different the heads of income being only the classification prescribed by the Indian Income Tax Act for computation of income." The same principles applies to the present case. 14. Thus in COCANADA RADHASWAMI BANK LTD supra the Supreme Court dealt with Section 24(2) of the Act which is parimateria with Section 72 of the Act. Therefore, the aforesaid decision applies to the fact s....