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2016 (2) TMI 804 - BOMBAY HIGH COURT

2016 (2) TMI 804 - BOMBAY HIGH COURT - [2016] 384 ITR 264 - Set off of loss from assets on which depreciation claimed - Capital gain arising from transfer of depreciable assets - whether was liable to be set off against brought forward Long Term Capital Loss - Held that:- We find that the issue stands concluded by the decision of this Court in ACE Builders (P) Ltd (2005 (3) TMI 36 - BOMBAY High Court) in favour of the Respondent-Assessee. Moreover, the impugned order relies upon the order of the .....

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set off as the amount of ₹ 7.12 Crores arising out of sale of depreciable assets which are admittedly on sale of assets held for a period to which long term capital gain apply. Thus for purposes of Section 74 of the Act, the deemed short term capital gain continues to be long term capital gain. Moreover, it appears that the Revenue has accepted the decision the Tribunal in Komac Investments and Finance Pvt Ltd (supra), as our attention has not been drawn to any appeal being filed from that .....

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the following questions of law, for our consideration:- (1) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in law in holding that capital gain arising from transfer of depreciable assets was liable to be set off against brought forward Long Term Capital Loss without appreciating that under section 50 of the Income Tax Act, 1961 such capital gain is treated as Short Term Capital Gain? (2) Whether on the facts and in the circumstances of the case .....

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er Section 50 of the Act. This deemed short term capital gain arose on account of the sale of depreciable assets. This deemed short term capital gain was set off against brought forward long term capital losses and unabsorbed depreciation. The Assessing Officer by his order dated 8th October, 2009 passed under Section 143(3) of the Act held that in view of Section 74 of the Act, such set off on short term capital gain against the long term capital gain is not permitted. Thus, disallowed the set .....

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by placing reliance upon the decision of this Court in the case of ACE Builders (P) Ltd (supra) and by following its own order in the case of Komac Investments and Finance Pvt Ltd v/s Income Tax Officer reported in 132 ITD 290. 5. Mr. Kotangale, learned counsel for the Revenue submits that in view of the clear mandate of Section 74 of the Act, no set off of the carry forward long term capital loss against the deemed short term capital gain under Section 50 of the Act is permissible. In the abov .....

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