TaxTMI 
TaxTMI 
2022 (3) TMI 299
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....rejudicial to the interest of revenue, is opposed to law and the facts and circumstances of the case. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to set off brought forward business loss and long term capital loss against current year's income when no such loss was available in the books due to being set off against share premium during the year. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not adjudicating on the point that no brought forward business loss and long term capital loss are available to the assessee in books during the relevant year due to being set off against share premium during the year. ....
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....e and do not call for any specific adjudication. Ground Nos.2 and 3 relates to the issue with regard to the claim of the assessee for set off of brought forward loss for Assessment Years 2008-09 and 2011-12 against Long Term Capital Gain (LTCG). 4. The assessee, a listed entity, was a pioneer in electronic goods and still has high Brand recall. Due to various reason, the company lost market share and incurred losses for the past many years. It had obtained a Corporate Debt Restructuring approved by the courts and based on the said order, liquidated its assets and paid off its secured lenders over a period of time. However, the balance sheet was burdened with accumulated loss. With a view to reflect the correct financial position, it appr....
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....s of change in shareholding or delayed filing of loss return. In the case of the assessee no such change in shareholding has been effected nor has there been any delay in filing of returns. The assessee submitted that there has not been any reduction of share capital either. Further, the assessee has capital loss carried forward of Rs. 27,55,73,246 based on orders under section 143(3) for Assessment Year 2013-14. Therefore, the assessee submitted that the addition made of Rs. 14,88,16,483 is incorrect in law and has to be deleted. 7. The AO observed that write off of investments is a colourable device. According to the AO, the Hon'ble Kerala High Court allowed the loss in the books of accounts that remained to be set off against share pr....
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.... a sham transaction, which is highly improper. The claims of losses pertaining to various years commencing from the Asst. year 2008-09 to 2013-14 are in respect of several transactions independently undertaken by the assessee, which have to be examined on record, to establish that they were sham. Accordingly, the CIT(A) directed the AO to undertake the exercise by scrutinising the final orders passed in respect of the previous years as per the available records and allow the claim of the assessee for set off. 11. Aggrieved by the order of the CIT(A), the Revenue has preferred ground Nos.2 and 3 before the Tribunal. We have heard the submissions of the learned DR who reiterated the stand of the assessee as contained in the order of the AO....
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....any years. The AO found that there was no payment made from 2018. The AO was of the view that the aforesaid liability no longer existed and by virtue of the provisions of section 41(1) of the Act, the aforesaid sums have to be added as income of the assessee. 14. Before CIT(A), the assessee submitted that the liabilities reflected in the balance sheet cannot be treated as cessation of liabilities. Merely because the liabilities are outstanding for last many years, it cannot be inferred that the said liabilities have ceased to exist. It is also a fact that the assessee has not written off the outstanding liabilities in the books of account and the outstanding liabilities are still in existence would prove that the assessee acknowledged hi....
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.... unilaterally or bilaterally treated the said transaction to be a nullity, thereby discharging the appellant of the liability to pay. The AO has not given any such finding of fact in the order. However, simply considering the presence of the creditors in the books, is no reason to assume that the liability has ceased by invoking the provisions of Section 41(1). Explanation 1 is as under: "Explanation . - For the purpose of this sub-section, the expression "loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof" shall include the remission or cessation of any liability by a unilateral act by the first mentioned person under clause (a) or the successor in business under c....