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TMI Blog2017 (8) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... per income tax it can be carried forward and set off against business income only. 2. That the order of the CIT(A) is perverse, erroneous and is not tenable on facts and in law. 3. That the grounds of appeal are without prejudice to each other. 4. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal. 2. The brief facts of the case are that the assessee filed its ereturn of income for the AY 2012-13 on 28.9.2012 declaring NIL taxable income. The case of the assessee was picked up for compulsory scrutiny, notice u/s. 143(2) of the Income Tax Act, 1961 (hereinafter referred the Act) was issued on 19.8.2013. Detailed questionnaire alongwith notice u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment order dated 03.3.2015, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 28.10.2016 has deleted the addition and allowed the appeal of the assessee. 3. Aggrieved with impugned order dated 28.10.2016, Revenue filed an appeal before the Tribunal. 4. Ld. DR relied upon the order of the AO and reiterated the grounds of appeal. 5. On the contrary, Ld. Counsel of the assessee relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference. 6. I have heard both the parties and perused the records and gone through the orders of the authorities below, especially the contention raised in the original grounds of appeal filed by the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that as per provision of section 72 of the Act, brought forward business loss can be set off only against business profit of the current year and not against income from any other source, including capital gain. Accordingly, the A.O. has concluded that sale of depreciable assets is taxable as short term capital gain as per provision of section 50 of the Act and therefore, brought forward business loss cannot be set off against short term capital gain. (iii) In the appellate proceedings, the appellant has submitted that there was unabsorbed depreciation of Rs. 76,97,417/-, pertaining to A.Y. 2003-04 and out of this, depreciation to the extent of short term capital gain of Rs. 31,35,606/-, was set off in terms of section 32(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income." 6.1 After going through the aforesaid finding of the Ld. CIT(A), I find that in the assessment order, the A.O. has stated that the assessee has sold the assets from block of plant and machinery for Rs. 1,04,71,296/- and the WDV as on 01.4.2011 of such block was Rs. 41,25,627/-. Accordingly, assessee has shown short term capital gain of Rs. 63,45,669/- (Rs. 1,04,71,296 - Rs. 41,25,627). This short term capital gain was partly set off against current year's business loss of Rs. 32,10,063/- and balance of Rs. 31,35,606/- against brought forward business loss from earlier years and income was declared at NIL by the assessee. The A.O. has also stated that the gain arising from sale of depreciable asset, is a short term capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f of depreciation from short term capital gain. However, the A.O. has wrongly understood the claim of set off of unabsorbed depreciation by the appellant, as set off of brought forward business loss and therefore, disallowed the claim. In these facts, the findings of the A.O. that the appellant has claimed set off of brought forward business loss, is not correct. It is also clear that the assessee has set off the unabsorbed depreciation, against short term capital gain in terms of section 32(2) r.w.s. 72(2) of the Act. In these facts and circumstances, the findings of the A.O. regarding set off of brought forward business loss, was not correct, hence, the claim of the assessee of brought forward depreciation against short term capital gain, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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