TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 660
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....inder Taxpayer's rebate / setoff claim of the Business Loss with the Short Term / Long Term Capital Gains of the same year permitted under the substantive sec.71(2) of the Income Tax Act. 1961. 4. The appellant prays that the right of appellant to first set-off Business Loss with Long Term / Short Term Capital Gains of the same year be upheld and further be directed to allow deduction of Rs. 1,93,000/- under chapter VI-A from Bank Interest of Rs. 9,38,549/- taxed under "Other Sources" Gr.II 1. The learned Addl./JCIT (Appeal)-6 Delhi, dealt upon an issue neither disputed by CPC nor by the Appellant and not appealed before her of set-off of Business Loss with Long Term/Short Term Capital Gain of the same year. 2. The CPC had always deducted Business Loss with Long Term/Short Term Capital Gains in the intimation passed under section 143(1) or rectification orders passed under section 154 of the Income Tax Act 1961. 3. The learned Addl./JCIT (Appeal)-6 Delhi, ought not to have dealt with an issue neither disputed nor appealed before her. 4. The appellant prays that appropriate Order be passed, deleting all those portions of the order of the Addl./JCIT (Appeal)-6 Delhi, de....
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....y other head of income including the head "capital gains". It was submitted that, the assessee thus exercised her option and set off the derivative loss with the Income under the head "Income from other sources" and Net Taxable Long term Capital Gain/Short Term Capital Gain, facilitating her to claim deduction under Chapter VI-A. 3.2 The assessee relied on the decision of Hon'ble Pune Bench of this Tribunal in case of Coated Fabrics Pvt. Ltd. Vs. JCIT reported in (2006) to 285 ITR 148 in support of this submission. The assessee also placed reliance on an old Circular No. 26(LXXVI- 3)[F. No. 4(53)-(IT)/54] dated 07/07/1955. Wherein it was prescribed how loss suffered under one head could be set off against income under any other head. 3.3 The Ld.CIT(A) after considering the submissions of the assessee observed and held as under: "Upon examining the submissions and relevant provisions of the Income Tax Act, the appellant's interpretation of Section 71(2) was found to be incorrect. While Section 71(2) allows the set-off of business losses against income from other heads, case laws and legislative intent establish that such losses cannot be set off against long-term capital gai....
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....based on explicit provisions of the law, leaving no room for discretionary interpretations by the software. In light of the above discussion, the appeal is dismissed. The denial of deductions under Chapter VI-A by CPC is upheld as per the provisions of the Income Tax Act, 1961, and judicial precedents." Aggrieved by the order of the Ld.CIT(A) the assessee is in appeal before this Tribunal. 4. The Ld.AR referring to the intimation issue by the CPC submitted that, the assessee had income under the head other sources at Rs. 9,38,459/- and the business loss of Rs. 11,60,579/-. It was submitted that, the assessee also had long term capital gain chargeable to tax at the rate of 20% at Rs. 1,02,45,891/-. 4.1 The Ld.AR submitted that, the assessee thus set off the business loss proportionately with the income from other sources to the extent of Rs. 2,48,717 and against the balance loss of Rs. 9,11,826/- against long term capital gains. It is submitted that, the assessee bifurcated the loss in such manner in order to take the benefit of deduction under Chapter VIA. 4.2 The Ld.AR emphasised that, section 71(2) does not restrict the assessee from exercising the option to set off the bus....
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....an "Capital gains", is a loss and the assessee has income assessable under the head "Capital gains", such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessable for that assessment year under any head of income including the head "Capital gains" (whether relating to short-term capital assets or any other capital assets). (2A) Notwithstanding anything contained in sub-section (1) or subsection (2), where in respect of any assessment year, the net result of the computation under the head "Profits and gains of business or profession" is a loss and the assessee has income assessable under the head "Salaries", the assessee shall not be entitled to have such loss set off against such income. (3) Where in respect of any assessment year, the net result of the computation under the head "Capital gains" is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to have such loss set off against income under the other head. (3A) Notwithstanding anything contained in sub-section (1) or subsection (2), where in respect of any assessment year, the net result of the computation under the....