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Chemito Technologies P. Ltd. Versus DCIT– 7 (3) , Mumbai

Disallowance out of travel expenditure - Held that:- As decided in the assessee’s own case for A.Y. 2009-10 a notice was issued by the AO, but no plausible explanation was tendered by the assessee. Moreover it is incumbent upon the assessee to prove this fact that the said expenditure was incurred upon the employee or incurred for business purpose. Therefore, in such circumstances, the AO has rightly declined the said travelling expenses being not incurred upon the employees of the assessee firm .....

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f the same against capital gains arising during the year.- Decided against assessee. - ITA No. 7052/Mum/2014 - Dated:- 12-4-2017 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain, Judicial Member For The Appellant : Shri Ruturaj H. Gurjar For The Respondent : Shri Chandra Vijay ORDER Per Jason P. Boaz, A.M. This appeal by the assessee is directed against the order of the CIT(A)- 13, Mumbai dated 25.09.2014 for A.Y. 2010-11. 2. The facts of the case, briefly, are as under: - 2.1 The .....

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03.2013 for A.Y. 2010-11, the assessee preferred an appeal before the CIT(A)-23, Mumbai, challenging (i) the Assessing Officer s (AO) disallowance of ₹ 6,78,893/- out of travel expenses and (ii) the action of the AO in holding that long term capital gains (LTCG) of ₹ 17,04,000/- should be adjusted against business loss under section 71(2) of the Act. The learned CIT(A) dismissed the assessee s appeal vide the impugned order dated 25.09.2014. 3. Aggrieved by the order of the CIT(A)-13 .....

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s and in the circumstances of the case and in law, the learned CIT(A) - 13 erred in holding that expenditure incurred on account of reimbursement of customers and consultants (being part of travelling expenditures) does not have nexus with business. Ld. CIT(A)-13 erred in not appreciating that the expenses were entirely deductible. 3. The learned CIT(A) -13 erred in holding that there is no option with the Appellant as regards setting off of business loss against capital gains. Ld. CIT(A) failed .....

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he AO; without appreciating that these expenditures were expended wholly and exclusively for the purposes of its business and were wholly deductible, being reimbursement to customers and consultants. At the outset of the hearing, the learned A.R. of the assessee fairly conceded that this very issue is squarely covered against the assessee by the decision of the Coordinate Bench of this Tribunal by its order in assessee s own case for A.Y. 2009-10. 4.2.1 We have heard the rival contentions and pe .....

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disallowance of an amount of ₹ 5,53,470/- on account of travelling expenses paid as reimbursement to the customers and consultant. The assessee had debited an amount of ₹ 90,30,897/- as travelling expenditure and at the time assessment, the AO verified the travelling expenses and found that an amount of ₹ 5,53,470/- were relating to nonemployees. A notice was issued by the AO, but no plausible explanation was tendered by the assessee. Moreover it is incumbent upon the assessee .....

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ssed. 4.2.2 Following the aforecited decision of the Coordinate Bench in the assessee s own case for A.Y. 2009-10 in ITA Nos. 447 &768/Mum/2013 dated 16.10.2015, we find no merit in the grounds and contentions raised by the assessee on the issue of disallowance of travel expenses of ₹ 6,78,893/- and accordingly decide this issue against the assessee. Consequently, grounds 1 and 2 of the assessee s appeal are dismissed. 5. Ground No. 3 - Set off of Business Loss against LTCG 5.1 In this .....

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lly considered the material on record; including the judicial pronouncements cited. We find that identical issue of set off of business loss against capital gains (whether STCG or LTCG) was considered by the Coordinate Bench in its order in the case of Sumaria Appliance Pvt. Ltd. in ITA No. 2712/Mum/2013 dated 11.06.2014 and it was held that the assessee had no option to carry forward business loss to subsequent years without setting off of the same against capital gains arising during the year. .....

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tal gains , he shall, subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head. (2) Where in respect of any assessment year, the net result of the computation under any head of income, other than Capital gains , is a loss and the assessee has income assessable under the head Capital gains , such loss may, subject to the provisions of this Chapter, be set off against his inco .....

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om business or profession . It is the contention of Ld. AR that word used in section 71(2) may gives an option to the assessee so as to whether adjust the said loss against capital gain or not. Thus, according to assessee it is entitled to carry forward business loss separately and to get assessed capital gain in the year under consideration. 7.2 In our considered opinion there is no force in the claim made by the assessee. Firstly, sub-section (2) of section 71 does not give any option to the a .....

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income, if any, assessable for that assessment year under any head of income including the head capital gains (whether relating to short term capital gain asset or any other capital asset). Thus, provisions of section 71(2) cannot be construed to give option to the assessee to carry forward business loss separately without set off of income arising out of short term capital gain. Only on the basis of word may as appearing in section 71(2), such benefit cannot be granted to the assessee as has b .....

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