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2022 (1) TMI 1156 - AT - Income TaxSet-off of net operations loss against income from house property and ‘other’ sources - set off of loss incurred from the activities coming under the purview of principle of mutuality against the income which is not coming under the purview of mutuality and brought to tax i.e., interest income received from member banks and rental income received from member tenants which was actually assessed under the regular provisions of the Act under the head Other Sources and House Property, respectively - HELD THAT:- As decided is own case [2021 (10) TMI 1290 - ITAT HYDERABAD] the legislative expression “head” of income must be taken as any of the five heads of income provided u/s. 14 of the Act i.e. salary, income from house property, profits and gains of business or profession, capital gains and income from other sources; respectively. We thus are of the opinion that once the assessee's impugned deficit arising from mutuality account is neither covered in any of the said heads as well nor u/s. 2(24)(vii) defining “income” in the very account, section 71 of the Act would not apply in isolation. Order of CIT(A) sustained wherein it was observed that: "it is well settled legal position that operational loss computed by the assessee coming under the purview of principle of mutuality cannot enter the computation of total income as envisaged u/s.2(45) of the Act. Accordingly, the ground of appeal raised by the assessee on treating such loss arising out of transactions covered under principle of mutuality as income / loss within the meaning of Sec. 28(iii) of the Act is dismissed. As a corollary, such loss cannot be set off against other taxable sources I heads of income of the assessee such as interest income from bank falling under Income from Other Sources, Income from House Property etc. as envisaged u/s.71 of the Act. Similarly, the provisions of Sec.72 of the Act are also not applicable with regard to carry forward and set-off of such losses in the subsequent AYs. Accordingly, all the grounds of appeal raised by the assessee are hereby dismissed” Decided against assessee.
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