MASTERS REALTY PVT.LTD,,PUNE vs. INCOME-TAX OFFICER, WARD - 14(4),, PUNE

The first notice of appeal was sent to the assessee through RPAD on 29-10-2018 for 29-11-2018. The notice of appeal was duly served as is

The assessee in appeal has assailed the order of Commissioner of Income Tax (Appeals) by raising following grounds : “1. On the facts and in the circumstances of the case and in law the Lower Authorities have erred in not allowing the set off of carried forward business loss and current business loss against the income from other sources of Rs.3,87,540/-. It is your appellant claim that he is entitled for the same as per the provisions of section 72 of the Income Tax Act, 1961.”

Shri Rajesh Gawali representing the Department vehemently supported the order of Commissioner of Income Tax (Appeals). The ld. DR to further strengthen his submissions relied on following decisions : i. Devi Electronics (P.) Ltd. Vs. Income Tax Officer, 77 taxmann.com 259 (Bombay); ii. Assistant Commissioner of Income Tax Vs. Lavish Apartment (P.) Ltd., 92 ITD 58 (Delhi).

I have heard the submissions made by the ld. DR and have perused the orders of authorities below. The assessee company is not carrying any business. The assessee has earned income from renting of the property and the same is offered to tax by the assessee under the head „Income from house property‟. Apart from above assessee has interest income of Rs.3,87,540/-. Expenses in respect of house property have already been allowed as standard deduction u/s. 24(a) of the Act. The assessee has claimed expenditure in respect of remuneration to Director. The Commissioner of Income Tax (Appeals) rejected the claim of assessee on the ground that since there is no business of the assessee, there is no question of business loss. The provisions of section 72 allow set off of business loss/carried forward business loss against income under any head (except under the head „Salaries‟). But to claim loss, the assessee has to show business activity was carried during previous year or in the past which resulted in generation of loss. There is no material available on record controverting the findings of Commissioner of Income Tax (Appeals). Therefore, I find no reason to interfere with the impugned order. Accordingly, the impugned order is upheld and the appeal of assessee is dismissed.

In the result, the appeal of assessee is dismissed.