SABEENA SILK MILLS ,MUMBAI vs. INCOME TAX OFFICER 31(1)(1), MUMBAI

ITA 1508/MUM/2025Status: DisposedITAT Mumbai14 August 2025AY 2021-22Bench: SHRI NARNDRA KUMAR BILLAIYA (Accountant Member), SHRI ANIKESH BANERJEE (Judicial Member)8 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal, following `Everest Kanto Cylinders Ltd.`, held that brought forward business loss cannot be set off against short-term capital gains computed under Section 50 of the Act. It clarified that Section 41(2) was inapplicable to the case, and such short-term capital loss/gain must be treated solely under the head "Capital Gains" as per Sections 70(2) and 71(3).

What were the facts?

The assessee declared capital gains under Section 50 from the sale of depreciated assets and sought to set off unabsorbed depreciation and brought forward business losses against it, resulting in 'Nil' taxable income. The Central Processing Centre (CPC) initially determined a higher income and, after rectification, allowed only unabsorbed depreciation set-off, disallowing the set-off of brought forward business loss. The CIT(A) upheld this disallowance, leading to the present appeal.

What were the issues?

Whether brought forward business loss can be set off against short-term capital gains arising from the sale of depreciated assets under Section 50 of the Income-tax Act, and the applicability of Section 41(2) in such a scenario.

Which sections of the Income-tax Act were involved?

Section 250,Section 154,Section 50,Section 143(1),Section 41(2),Section 32(1)(i),Section 43(6)(c)(i),Section 70,Section 70(2),Section 71,Section 71(3)

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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: SHRI NARNDRA KUMAR BILLAIYA & SHRI ANIKESH BANERJEE

For Appellant: Shri H.N. Motiwala
For Respondent: Shri Leyaqat Ali Aafaqui (SR.DR.)
Hearing: 01/08/2025Pronounced: 13/08/2025

Per Anikesh Banerjee (JM):

The instant appeal of the assesse was filed against the order of the National Faceless appeal Centre (NFAC), Delhi [in short, ‘the Ld. CIT(A)] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) for Assessment Year 2021-22, date of order 25/01/2025. The impugned order emanated from the order of the CPC, Bengaluru passed under section 154, date of order 28/02/2023. 2 ITA 1508/Mum /2025 Sabeena Silk Mills

2.

The assessee has taken the following grounds:- “The grounds mentioned hereunder are without prejudice to one another.

1.

On the facts and in the circumstances of the case, the learned Commissioner of Income tax, Nat

The order continues below.

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