2021 (9) TMI 1577
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....he return was processed under Section 143 (1) on 8th April, 2004 accepting the return of income. The case was reopened on 13th June, 2005 after recording reasons for re-opening that the assessee had set off unabsorbed business loss against capital gain. Assessee vide its letter dated 30th June, 2005 had objected to the reopening. Finally after granting a personal hearing and hearing the assessee the Assessment Officer has passed an order dated 7th December, 2006 disallowing the set off against short term capital gains by assessee of the earlier years' unabsorbed depreciation and carry forward a business loss against capital gain. The assessee had sold block of assets, i.e., buildings / development, factory building, and plant and machinery ....
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....wing set off under Section 72(1) of the unabsorbed brought forward business loss against the deemed short term capital gain assessed under Section 50 in so far as such gain represented the recoupment of depreciation allowed in the past, and, therefore, its true nature and character was that of the business income, notwithstanding its assessment under a different head on deeming basis. Your appellant, therefore, prays that the set off of brought forward business loss be allowed against the deemed short term capital gain assessed under Section 50. The Tribunal decided this question in favour of assessee because what was sold by assessee was a business asset. The answer of ITAT to the second question is challenged by the revenue in this app....
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....der the head "profits and gains of business or profession" is a loss to the assessee, 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. Section 72(1) of the Act employs the expression "computation under the head profits and gains of business or profession", whereas, Section 72(1) (i) does not use the said expression but it says "against profits and gains, if any of any business or profession". Therefore, what is required to be seen is whether profits and gains against which the loss is sought to be set off was part of the business activity of the assessee or business asset of the assessee. Admittedly, in this case the assessee had sold block of....