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2016 (6) TMI 530 - AT - Income TaxPriority of Adjustment of business loss against the Long Term Capital Gains and interest income - contention of the assessee company for adjustment of business loss first against the interest Income and then against the Long Term Capital, thereby leaving only LTGC to be taxed at 20% as applicable on it - Held that:- Section 71(2) makes it clear that in respect of any assessment year, when the net result of the computation under any head of income, other than ‘Capital gains’, is a loss and the assessee’s income is assessable under the head ‘Capital gains’, the assessee would be entitled to the set off such loss against his income, assessable for that assessment year under any other head including income assessable under the head Capital gains’. The Section does not states that the business loss has to be adjusted first with particular head of income. In respect of any assessment year, when the net result of the computation under any head of income, other than ‘Capital gains’, is a loss and the assessee’s income is assessable under the head ‘Capital gains’, the assessee would be entitled to set off such loss against his income which is assessable for that assessment year under any other head including income assessable under the head ‘Capital gains’. The ITAT, Pune Bench decision in case of Coated Fabrics (P.) Ltd. Vs. JCIT [2006 (1) TMI 228 - ITAT PUNE-A] is applicable in the present case as facts are similar in both the matter as relates to whether option is available to an assessee for set off of any head of loss against any head of income including capital gain assessable for that assessment year. The said question was answered in favour of the assessee therein. The CIT(A) while dismissing the appeal of the assessee, mis- interpreted the said order of the Appellate Tribunal which is binding on the CIT(A) and has to be followed by the CIT(A) being superior appellate authority. - Decided in favour of assessee
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