{"id":4173,"date":"2012-01-11T18:06:49","date_gmt":"2012-01-11T18:06:49","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=4173"},"modified":"2012-01-11T18:06:49","modified_gmt":"2012-01-11T18:06:49","slug":"nandi-steels-ltd-vs-acit-itat-bangalore-special-bench-s-72-gains-arising-from-business-assets-not-eligible-for-set-off-against-bfd-business-loss","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/nandi-steels-ltd-vs-acit-itat-bangalore-special-bench-s-72-gains-arising-from-business-assets-not-eligible-for-set-off-against-bfd-business-loss\/","title":{"rendered":"Nandi Steels Ltd vs. ACIT (ITAT Bangalore Special Bench)"},"content":{"rendered":"\n\n
Click here to download the judgement (nandi_steel_capital_gains_business_loss.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nS. 72: Gains arising from “business assets” not eligible for set-off against B\/fd business loss
\n<\/strong><\/p>\n

The assessee sold land & building used for business purposes. Though the gain was offered as capital gains, the assessee claimed, relying on Cocanada Radhaswami<\/strong> Bank Ltd 57 ITR 306 (SC) and other judgements, that as the assets were “business assets”, the gains there from were eligible for set-off against the brought forward business loss u\/s 72. The issue was referred to a Special Bench. HELD by the Special Bench against the assessee:<\/p>\n

S. 72 (1) allows brought forward business loss to be set-off against the “profits & gains of any business or profession<\/em>” of the subsequent year. The expression “profits & gains of business<\/em>” means income earned out of business carried on by the assessee and not just income connected in some way to the business or profession carried on by the assessee<\/strong>. The land & building were fixed & capital assets used by the assessee for its business purposes. The gains arising there from were assessable as capital gains and were not eligible for set-off<\/strong> against the brought forward business loss u\/s 72 (Express Newspapers<\/strong> 53 ITR 250 (SC) followed; Cocanada Radhaswami<\/strong> Bank 55 ITR 17(SC) distinguished; Steelcon Industries<\/strong> reversed)<\/p><\/blockquote>\n

\nNote<\/strong>: Digital Electronics Ltd<\/strong> 135 TTJ 419 (Mum), J.K. Chemicals Ltd<\/strong> 33 BCAJ 36 & Sri Padmavathi Srinivasa<\/strong> 29 DTR 1 (Vish) are impliedly overruled\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

S. 72 (1) allows brought forward business loss to be set-off against the “profits & gains of any business or profession<\/em>” of the subsequent year. The expression “profits & gains of business<\/em>” means income earned out of business carried on by the assessee and not just income connected in some way to the business or profession carried on by the assessee<\/strong>. The land & building were fixed & capital assets used by the assessee for its business purposes. The gains arising there from were assessable as capital gains and were not eligible for set-off<\/strong> against the brought forward business loss u\/s 72 (Express Newspapers<\/strong> 53 ITR 250 (SC) followed; Cocanada Radhaswami<\/strong> Bank 55 ITR 17(SC) distinguished; Steelcon Industries<\/strong> reversed)<\/p>\n

Read more ›<\/a><\/div>\n

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