TMI Blog2021 (9) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... sources' Therefore, in our considered view business loss should be first set off against income from house property and then followed by income from long term capital gain and further still unabsorbed loss remains, it should be set off against income from other sources. Therefore, we set aside appeal to the file of AO and direct him to recompute total income, after allowing set off of loss under the head income from business or profession in terms of our observations herein above - Appeal of assessee is treated as allowed for statistical purposes. - I.T.A. No. 2992/Chny/2019 - - - Dated:- 8-9-2021 - Shri V.Durga Rao, Judicial Member And Shri G.Manjunatha, Accountant Member For the Appellant : Mr. Arjunraj, C.A for S.Sridh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w scope of the provisions in section 154 of the Act. 5. The CIT (Appeals) erred in not adjudicating the issue raised with regard to the narrow scope of the provisions in section 154 of the Act while overlooking the provisions of Section 71(2) of the Act and further ought to have appreciated that the sequence prescribed for set off of loss under other/various heads of income is a debatable issue. 6. The CIT (Appeals) erred in recording findings that the Appellant has agreed for adjustments carried out in the rectification order without appreciating the fact that the proposal for rectification by the Assessing Officer was only with respect to setting off of business loss against the salary income and not against other debatable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f business loss against income under the head long term capital gain, without following procedure laid down under sub-section (2) of section 71 of the Act. 4. The learned CIT(A), after considering relevant facts and also taken note of provisions of section 71(2) and 71(2A) of the Act, rejected arguments of the assessee and affirmed findings of the Assessing Officer in rectifying assessment order to disallow claim of business loss against income under the head salary by holding that there is no hierarchy prescribed for setting up off income amongst other heads of income u/s.71(2) of the Act, but what was prescribed is loss from any head of income, other than capital gains and business or profession can be adjusted against income from ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of loss under the provisions of section 71(2), then the Assessing Officer can adjust loss against gross total income and thus, there is no merit in the arguments of the assessee that loss should be first adjusted against income from house property and income from other sources. 7. We have heard both the sides, perused material available on record and gone through orders of the authorities below. Admittedly, the assessee has not challenged legality of rectification order passed by the Assessing Officer u/s.154 of the Income Tax Act, 1961. The assessee had also not challenged reasons of the Assessing Officer in not allowing set off of business loss against income under the head salary, because such adjustment is specifically barred by l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sources. In this case, loss from business is at ₹ 2,16,19,416/-. Further, the income under the head income from house property is at ₹ 3,69,049/-, and income under the head long term capital gain is at ₹ 54,34,13,229/- and further income under the head income from other sources is at ₹ 1,82,83,017/-. Therefore, in our considered view business loss of ₹ 2,16,19,416/- should be first set off against income from house property and then followed by income from long term capital gain and further still unabsorbed loss remains, it should be set off against income from other sources. Therefore, we set aside appeal to the file of Assessing Officer and direct him to recompute total income, after allowing set off of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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