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2018 (10) TMI 1397 - AT - Income TaxComputation of short term capital gains and its adjustment against brought forward depreciation loss and / or business loss - Set off of current year’s business loss and brought forward depreciation loss and brought forward business loss against current year’s short term capital gain arising on sale of business asset i.e. party hall - Held that:- The said short term capital gain arises on sale of business assets on which the assessee was claiming depreciation and in view of section 50 the gain was held to be deemed short term capital gain, though the assessee was holding the asset for long time and had fulfilled the conditions of long term capital gain. The learned Authorized Representative for the assessee also placed reliance on the decision of Tribunal in Digital Electronics Ltd. Vs. Addl.CIT (2010 (10) TMI 722 - ITAT, MUMBAI) and pointed out that the issue was decided in favour of assessee, which was followed in M/s. Hickson & Dadajee Pvt. Ltd. Vs. ACIT [2014 (2) TMI 1293 - ITAT MUMBAI] also approved by the Hon’ble Bombay High Court in CIT Vs. M/s. Hickson & Dadajee Pvt. Ltd.[2017 (3) TMI 274 - BOMBAY HIGH COURT]. Since the issue has been settled by the Hon’ble Bombay High Court, we find no merit in the order of CIT(A) in relying on another decision of Mumbai Bench of Tribunal and holding the issue to be against the assessee. Unabsorbed depreciation which has been carried forward from preceding year is to be set off against the income shown by assessee under the head ‘short term capital gain’ under section 50 of the Act. Set off of adjustment on account of brought forward business loss which was not claimed in the return of income - Held that:- Referring to ratio laid down in CIT Vs. Pruthvi Brokers & Shareholders Pvt. Ltd. [2012 (7) TMI 158 - BOMBAY HIGH COURT] wherein it has been held that any claim can be made before appellate authorities, which need to be adjudicated while determining income of assessee. We find merit in the plea of assessee in this regard and hold that business loss carried forward from earlier year of ₹ 8,65,154/- needs to be adjusted against income assessed under the head ‘short term capital gain’ under section 50 of the Act. Similarly, current year business loss is to be set off against the said income. Accordingly, we allow the claim of assessee.
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