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2021 (3) TMI 320 - ITAT JAIPURLoss on sale of depreciable assets - Disallowance of short term capital loss on sale of machinery and short term capital loss on sale of furniture - AR submitted that the assessee was engaged in the business of sale and supply of marble tiles which was discontinued since last 3-4 years and there is no business activity during the year under consideration - HELD THAT:- No finding of the AO regarding the claim of short term capital loss in the assessment proceedings and only during the remand proceedings, the matter was examined by the AO wherein the assessee submitted that since it has sold land and building, it has also sold old plant and machinery, and furniture. AO in his remand report thereafter stated that the claim of the assessee is not verifiable and hence, not acceptable. We therefore find that the AO had some apprehension about the value of such plant and machinery and furniture and in order to verify the same, had issued the summons to the purchaser, however due to death of the purchaser, the sale consideration could not be verified. However, he has not disputed the fact that such assets have been found recorded in the assessee’s books of accounts as on the beginning of the year and have since been disposed off way back in 2008, therefore, mere apprehension cannot be a basis to deny the fact that these assets have been sold at the stated consideration as evidenced by the sale receipts. Similarly, the findings of the ld CIT(A) that no evidence for sale of plant and machinery was brought on record is incorrect as the assessee has submitted the sale receipts in support of such transactions which have infact been taken on record by the ld CIT(A) and sent for AO’s comments and verification. Lastly, non-filing of the return of income by due date can be basis for denial of claim for carry forward of losses as per section 139(3) of the Act, therefore, in the instant case, where admittedly and undisputedly there is no such claim by the assessee in terms of carry forward of such losses on account of sale of plant and machinery and furniture, the reasoning adopted by the ld CIT(A) is not sustainable as the same is not in accordance with law. In the result, the AO is directed to allow the claim of short term capital loss on sale of plant and machinery and furniture for being set off against other income as per provisions of law for the impugned assessment year. Appeal of the assessee is allowed.
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