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2018 (11) TMI 1235 - AT - Income TaxNature of loss - short term capital loss or revenue loss - loss incurred on capital contribution in joint venture - short term capital loss adjustment against the capital gain - Held that:- The assessee had entered into an agreement with other party M/s. R.A. Business Solution Bangalore as per which the assessee was to be paid ₹ 66 lacs immediately and the balance amount of ₹ 6,69,00000/- was claimed as revenue loss by the assessee for the year under consideration. However, the assessing officer has held that above cited loss is not allowable because capital contribution to Joint venture is not revenue expenditure. The above facts demonstrate that the assessing officer himself has treated the claim of revenue loss of the assessee as capital loss. We have noticed from the findings of the ld. CIT(A) that this alternative claim was also made before the assessing officer however the same has not been considered by the assessing officer at the time of finalization of the assessment for the year under consideration. It is clear from the findings of the assessing officer and the CIT(A) that assessing officer has himself treated the revenue loss claim of the assessee as capital loss. No infirmity in the decision of the CIT(A) directing the assessing officer to adjust the short term capital loss against the capital gain as per section 70(2) of the act as the Department has treated the claim of revenue loss of the assessee as capital loss. No merit in the cross objection filed by the assessee as the assessee itself had made alternative claim to set off loss against capital gain as elaborated in the findings of the CIT(A). Accordingly, the appeal of the Revenue and cross objection filed by the assessee are dismissed.
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