M/S. GLOBE TEXTILES,SURAT vs. THE INCOME TAX OFFICER, WARD-2(1), NOW RE-DESIGNATED AS INCOME TAX OFFICER, WARD 1(2)(6), SURAT

ITA 1227/AHD/2016Status: DisposedITAT Surat14 December 2018AY 2011-127 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that brought forward business and depreciation losses are allowable for set-off against capital gains arising from the sale of business assets, even if assessed as capital gains. It also held that land and building are distinct assets, and capital gains on land should be treated as long-term capital gains.

What were the facts?

The assessee sold its factory land and building, offering the profit as business income and seeking to set off brought forward business and depreciation losses. The AO treated the entire gain as short-term capital gain and disallowed the set-off, which was confirmed by the CIT(A).

What were the issues?

Whether brought forward business and depreciation losses can be set off against capital gains on sale of business assets, and whether land and building should be treated as separate assets for capital gains computation.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 71,Section 72,Section 50(2)

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Income Tax Appellate Tribunal, “SURAT” BENCH, SURAT

Before: SHRI AMARJIT SINGH&

For Appellant: Mr. Rasesh Shah, A.R
For Respondent: Ms. Anupama Singla, Sr. D.R
Hearing: 20/11/2018Pronounced: 14/12/2018

PER Ms. MADHUMITA ROY - JM:

The instant appeal filed by the assessee is against the order dated 25.02.2016 passed by the Commissioner of Income Tax (Appeals)-II, Surat arising out of the assessment order dated 28.03.2014 for the Assessment Year 2011-12 passed by the ITO, Ward 2(1), Surat under section 143(3) of the Income Tax Act, 1961 (The Act) with the following grounds: 1. “On facts and circumstances of the case, the learned CIT(A) has grossly erred in confirming the action of the ld. ITO in not allowing the set off of the brought forward business and depreciation loss against the profit on sale of depreciable assets, which is erroneous and needs 'to be allowed in the interest of natural justice and equity.

2.

Without prejudi

The order continues below.

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