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2022 (4) TMI 712 - AT - Income TaxRevision u/s 263 by CIT - set off of the brought forward "non-speculative business loss" against the "profit of speculative business" - HELD THAT:- This simply means the computation of taxable income of 'speculative business" and "non-speculative business" cannot be combined together, the figures have to be separately arrived at for each segment. Having arrived at such separate figures of two segments, if there arises necessity of set off in case of negative figure (i.e. loss) from either segment, we have to look upon the provisions of section 72 and 73. We believe that it may not be correct to say that by segregating two segments as per mandate of section 28, there is an automatic consequence that loss of one segment cannot be set off against profit of another segment. If that be so, what would be the necessity of section 72 and 73? Therefore, we have to look upon the provisions of section 72 and 73, which fall under the Chapter VI, to understand what is allowed and what is prohibited in the matter of set off. AR has already put forward the analysis of section 72 and 73 supported by the legal precedents. We do not want to reproduce the same for the sake of brevity but the Ld. AR is right in submitting the interpretation that the "loss of speculative business" cannot be set off against the "profit of non-speculative business" but the loss of "non-speculative business" is allowed to be set off against "profit of speculative business". We observe that the assessee was justified in claiming set off of the brought forward "non-speculative business loss" against the "profit of speculative business" and the Ld. AO has allowed the same, which is very much in accordance with the provisions of the Act. Therefore the order passed by the Ld. AO is neither suffering from any error nor prejudicial to the interest of revenue. Being so the Ld. PCIT has wrongly invoked the provisions of section 263 which are not applicable to the present case. Therefore we are persuaded to quash the revision-order passed by the Ld. PCIT u/s. 263 - Decided in favour of assessee.
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