TMI Blog2021 (5) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision relied upon by the ld. CIT(A) - Therefore, the issue is squarely covered by the decision of this Tribunal against the Revenue, hence, we find no reason to interfere with the order of ld. CIT(A) and dismiss the appeal of the Revenue. - I.T.A. No. 434/VIZ/2019, C.O.No. 05/VIZ/2020 (Arising out of I.T.A. No. 434/VIZ/2019) - - - Dated:- 5-5-2021 - Shri N.K. Choudhry, Hon ble Judicial Member And Shri D.S. Sunder Singh, Hon'ble Accountant Member For the Assessee : Shri G.V.N. Hari, Advocate For the Department : Shri K.S. Rajendra Kumar, CIT DR ORDER PERD.S. SUNDER SINGH, ACCOUNTANT MEMBER This appeal by the Revenue and the cross objection by the assessee are directed against the order dated 04/04/2019 impugned herein passed by the ld.Commissioner of Income Tax (Appeals)-2 [for short, ld. CIT(A) ], Guntur, u/sec. 250(6) of the Income Tax Act, 1961 (hereinafter referred to as Act ) for the A.Y. 2015-16. 2. All the grounds of appeal are related to the adjustment made by the CPC (Centralized Processing Centre) u/sec. 143(1) of the Act. 3. Brief facts of the case are that the assessee filed it s return of income on 27/10/2015 declaring total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant part of the order of Hon'ble ITAT, Visakhapatnam is reproduced as under: 6.1. As contended by the learned Authorised Representative, the gain arising on sale of depreciable assets is taxed as short-term capital gain in view of the legal fiction created by section 50 of the Act. Otherwise, such gain is normally treated as part of business receipt only. The l-lon1ble Madhya Pradesh High Court in the case of Shrikishan Chandmal (supra) has held that the dividend income from shares held as stock-in-trade which is assessable as income from other sources , can be set off against brought forward business loss. The Hon'ble Supreme Court in the case of Western States Trading Co. (P) Ltd (supra) has also approved the decision of Hon'ble Madhya Pradesh High Court cited above. In view of the propositions laid down in the above cited case law, we are of the opinion that the assessee is entitled to claim set off of unabsorbed depreciation and eligible business loss, if any, against short-term capital gain computed under section 50 of the Act. Hence we find merit in the contention of the learned Authorised Representative, in any case, the dispute with regard to the eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CIT v. Millind Trading Co. (P.) Ltd. [1994] 76 Taxman 389/[1995] 211 ITR 690 , holding that there is no provision which gives option to the assessee to show the profit as income from one source and carry forward a loss from other source of income to the next year. The CIT(A) also referred to the judgment of the Hon'ble Supreme Court in the case of CIT v. Urmila Ramesh [1998] 96 Taxman 533 , holding that provisions of s. 41(2) as also s. 50 cannot apply to the same amount. It was in this backdrop that the CIT(A) concluded that the income which is to be assessed under the head Capital gains cannot be set off against business losses only because it has been generated from the sale of business assets. The action of the AO was thus upheld and in fact fortified by the CIT(A). The assessee is aggrieved and is in appeal before us. 9. We have heard the rival contentions and perused the material on record. Sec. 72 of the IT Act, inter alia, provides that where for any assessment year, the net result of the computation under the head Profits and gains of business or profession is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions is concerned, only with the nature of gains being from business and not with the head of tax. Their Lordships held that as long as the profits and gains are in the nature of business profits and gains, and even if these profits are liable to be taxed under a head other than income from business and profession, the loss carried forward can be set off against such profits of the assessee. In this view of the matter, the objection raised by the authorities below, in our humble understanding, are devoid of any legal substance. Coming to the judicial precedents cited by the CIT(A), we find that in the case of Millind Trading Co. (P.) Ltd. (supra), their Lordships were concerned with the question whether or not the assessee had option of not setting off the losses incurred against the income from different sources under the head Business income . The issue was thus confined to the question as to how the total income for a particular assessment year is to be computed. This decision has no bearing on the issue in appeal before us. So far as the Hon'ble Supreme Court judgment in the case of Urmila Ramesh (supra) is concerned, it will have no bearing on the issue before us, because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and decision has to be arrived at. Such legal issues are not permissible to decide u/sec. 143(1) as decided by this Tribunal in the case of M/s. VisakhaJilla Nava Nirmana Samithi Vs. DCIT in ITA No. 152/VIZ/2019. For the sake of clarity and convenience, the relevant part of the order of this Tribunal in para 5 which reads as under:- 5. We have heard both the parties, perused the material placed on record. As per the adjustments made by the CPC, Bangalore to the extent of ₹ 7,31,016/- u/sec. 143(1)(a) is an issue which required to be verified with the relevant documents. Therefore, the adjustments are not within the scope provided u/sec. 143(1) (a) of the Act. As per proviso to section 143(1)(a), the AO is required to give an intimation before making such adjustments, either in writing or in electronic mode and the department has not demonstrated that it has given an intimation to the assessee proposing to make such adjustments. Therefore, the adjustment made by the CPC u/sec. 143(1)(a) is beyond the scope of the said section, hence, not permissible and accordingly deleted. Even otherwise, the ld. CIT(A) has followed the decision of this Tribunal while allowing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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