Case Law Details
Gouranga Cement Pvt. Ltd. Vs DCIT (ITAT Kolkata)
We have heard the rival contentions and perused the material available on record. In the instant case the assessee has shown business income of ₹13,36,761/- and LTCG income of ₹86,30,498/- only. Besides the above assessee has shown unabsorbed brought forward business loss of ₹16,64,542/- which was set off against the business income to the extent of ₹13,36,761/- by the assessee. The assessee has offered the tax on LTCG at special rate @ of Rs. 20% for Rs. 17,26,100.00 (20% of Rs. 86,30,498.00 only) which transpires that the assessee has not set off the remaining brought forward business loss of Rs. 3,27,763.00 (16,64,542.00 – 13,36,761.00) against the LTCG. Thus the balance amount of unabsorbed brought forward business loss of ₹3,27,763/- was carried forward to the subsequent year by the assessee.
However, the AO set off the entire business brought forward loss against the LTCG income declared by assessee. Thus, AO levied tax on the business of ₹13,36,761/- as well as charged LTCG tax @ 20% on the remaining amount of LTCG income i.e. Rs. 69,65,974.00 (Rs. 86,30,498.00 – 16,64,542.00). The view taken by the AO was upheld by the Ld. CIT(A). Now the issue before us arises for our consideration so as to whether the impugned loss of ₹16,64,824/- i.e. unabsorbed brought forward loss should be set off against the business income of ₹13,36,761/- and balance of ₹3,27,763/- against the LTCG income.
A plain look at the above statutory provision makes it clear that the unabsorbed brought forward business loss needs to be set off against the business income declared by assessee for the year under consideration. There is no dispute that assessee has shown business income of ₹13,36,761/- for the year under consideration. Therefore, in our considered view, assessee is very much entitled to claim the set off of the brought forward unabsorbed business loss against the income declared under the head “business”.
The amount which has not been set off against the business income of the assessee can be set off against the LTCG income of the assessee in view of the order of Hon’ble Mumbai Tribunal in the case of Digital Electronics Ltd.
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