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“Section 71(2)”

Section References (mined)Section 71Section 71(2)17 judgments

The decision most relied on for Section 71(2) is CIT v. Shivakami Co. (P.) Ltd. (159 ITR 71), cited in 133 judgments on BharatTax.

Leading authorities on Section 71(2)

CIT v. Shivakami Co. (P.) Ltd.
159 ITR 71 · 1986 · Supreme Court
133
citing judgments

The burden of proving an understatement of consideration or the receipt of 'on-money' lies solely with the Revenue, which must provide cogent evidence of actual receipt of higher consideration, beyond mere estimates or suspicion. Additions cannot be made based on assumptions like differences from circle rates without such evidence.

Mazagaon Dock Ltd. v. CIT & Excess Profits Tax
34 ITR 368 · 1958 · Supreme Court
57
citing judgments

Investments made by a holding company in its subsidiary can be considered a business activity, allowing related business expenditures to be deducted and not disallowed.

CIT v. Mythreyi Pai
152 ITR 247 · 1985 · High Court
44
citing judgments

Expenditure incurred towards the purchase of shares is a capital expenditure and therefore, interest expenditure incurred on such purchases is not eligible for deduction under Section 36(1)(iii) of the Income Tax Act.

CIT v. Upasana
225 ITR 845 · 1997 · High Court
41
citing judgments

Expenditure incurred by a holding company for making investments in a subsidiary can be treated as business expenditure and is not disallowable, as such investment activity can itself constitute a business.

Jagdish Kumar Gulati v. CIT
269 ITR 71 · 2004 · High Court
39
citing judgments

An Assessing Officer (AO) is expected to conduct a detailed inquiry during assessment proceedings under Section 143(3) and should not accept the assessee's claims at face value. A failure to investigate glaring issues amounts to a lack of proper inquiry.

Agro Portfolio (P.) Ltd. v. ITO
94 Taxmann.com 112 · 2018 · High Court
33
citing judgments

The Assessing Officer (AO) has the power to disturb the valuation of shares provided by the assessee's chartered accountant, even if Rule 11UA(2) is followed. If the AO doubts the valuation report, they are not necessarily bound to refer the matter to the Valuation Officer and can adopt a different method to determine the fair market value.

Bimla Singh v. CIT
308 ITR 71 · 2009 · High Court
27
citing judgments

A difference between the registered value of a property and the assessee's declared value, if within a 10% tolerance limit, does not warrant an addition to income. Decisions rely on this case to argue that minor valuation discrepancies should not lead to additions.

Goodyear (I) Ltd. v. ITO
73 ITD 189 · 2000 · ITAT
27
citing judgments

Expenditure incurred for the transfer of the use of licenses, without acquiring ownership rights or an enduring benefit, constitutes revenue expenditure. Such payments are allowable as a deduction if they are directly relatable to services in the revenue field.

Judgments citing Section 71(2)

Kamal Kant, Delhi vs. ITO, Ward-54(1), Delhi

In the result, the appeal of the assessee is allowed for statistical purpose

ITA 3594/DEL/2023[2009-10]Status: DisposedITAT Delhi17 Sept 2025AY 2009-10

Bench: Sh. Sudhir Kumar & Sh. Manish Agarwalassessment Year: 2009-10 Kamal Kant Vs. Income Tax Officer Ward K-15 South Extension –One 54(1) Civic Centre Delhi New Delhi 110049 Pan No. Aaipk 1374K (Appellant) (Respondent)

Section 143(1)Section 154Section 234ASection 43(5)(d)Section 70Section 70aSection 71(2)

facts of the case by dismissing the appeal of the appellant for providing the due relief under the provisions of section 71(2) of the Act by confirming the rejection order under section 154 of the Act dated 30-07-2020 by jurisdictional AO and thereby also confirming the assessment ... NFAC the assessee is in appeal before the Tribunal. 7. The Ld. AR of the assessee submitted that as per section 71(2) of the Act the loss of the assessee under the head of Business and profession can be set off with the income under the “Capital Gain”. Reliance

Il&Fs Investment Managers Limited, Mumbai vs. Deputy Commissioner of Income Tax - 14(1)(1), Mumbai

In the result the appeal filed by the assessee stands allowed

ITA 3780/MUM/2025[2023-24]Status: DisposedITAT Mumbai31 Jul 2025AY 2023-24

Bench: Shri Amit Shukla & Smt. Renu Jauhri

For Respondent: Ms. Hetal Vora
Section 143(1)(a)Section 250Section 80M

however did not agree with the contention of the assessee and held that as per the provisions of Section 71(2), the assessee had the right to set off its business loss but, not in any prescribed order. Accordingly, Ld. CIT(A) upheld the action of CPC in restricting ... Page 8 ITA No. 3779&3780/Mum/2025 AY 2022-23 &2023-24 IL & FS Investment Managers Limited 5.4 The Ld.AR further submitted that, the section 71(2) also do not emphasis to what extent the loss is to be set off against a particular head. This further gives benefit

Il&Fs Investment Managers Limited, Mumbai vs. Deputy Commissioner of Income Tax - 14(1)(1), Mumbai

In the result the appeal filed by the assessee stands allowed

ITA 3779/MUM/2025[2022-23]Status: DisposedITAT Mumbai31 Jul 2025AY 2022-23

Bench: Shri Amit Shukla & Smt. Renu Jauhri

For Respondent: Ms. Hetal Vora
Section 143(1)(a)Section 244ASection 250Section 80M

however did not agree with the contention of the assessee and held that as per the provisions of Section 71(2), the assessee had the right to set off its business loss but, not in any prescribed order. Accordingly, Ld. CIT(A) upheld the action of CPC in restricting ... Page 9 ITA No. 3779&3780/Mum/2025 AY 2022-23 &2023-24 IL & FS Investment Managers Limited 5.4 The Ld.AR further submitted that, the section 71(2) also do not emphasis to what extent the loss is to be set off against a particular head. This further gives benefit

Varun Batra, Mumbai vs. National Faceless Appeal Centre (NFAC), Delhi

In the result, the appeal filed by the assessee is hereby dismissed

ITA 3205/MUM/2022[2013-14]Status: DisposedITAT Mumbai31 Jul 2025AY 2013-14

Bench: Ms. Kavitha Rajagopal, Jm & Shri Prabhash Shankar, Am Varun Batra National Faceless Appeal Centre Flat 5, 5Th Floor, La Mer, Mistry Park, (Nfac) Kadeshwari Temple Road, Bandra Vs. West, Mumbai – 400050. Pan/Gir No. Aezpb9157L (Appellant) : (Respondent) Assessee By : None Respondent By : Ms. Kavita P. Kaushik, (Sr Dr) Date Of Hearing : 01.07.2025 Date Of Pronouncement : 31.07.2025 O R D E R Per Kavitha Rajagopal, J M: This Appeal Has Been Filed By The Assessee, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals) Delhi (‘Ld. Cit(A)’ For Short), National Faceless Appeal Centre (‘Nfac’ For Short) Passed U/S.250 Of The Income Tax Act, 1961 (‘The Act'), Pertaining To The Assessment Year (‘A.Y.’ For Short) 2013-14. 2. The Assessee Has Raised The Following Grounds Of Appeal: 1. That The Learned Commissioner Of Income Tax (Appeals), Delhi Has Grossly Erred Both In Law And, On Facts In Upholding The Determination Of Total Income Of The Appellant At Rs. 2,46,16,528/- As Against Declared Income At Rs. 2,30,52,930/- In An Order Of Assessment Dated 18.03.2016 U/S 143(3) Of The Act. 2. That The Learned Commissioner Of Income Tax (Appeals), Delhi Has Grossly Erred Both In Law & Fact In Holding That Sum Of Rs. 15,33,595/-Representing Loss On Account Of Share Trading. Varun Batra

For Appellant: NoneFor Respondent: Ms. Kavita P. Kaushik, (SR DR)
Section 143(2)Section 143(3)Section 234BSection 234CSection 250Section 68Section 71Section 72

IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SHRI PRABHASH SHANKAR, AM Varun

Priya Kapil Todarwal, Mumbai vs. Income Tax Officer Ward, 30(1)(1), Mumbai

In the result the appeal filed by the assessee stands allowed

ITA 1838/MUM/2025[2019-20]Status: DisposedITAT Mumbai30 Jun 2025AY 2019-20

Bench: Smt. Beena Pillai () & Smt. Renu Jauhri ()

Section 143(1)Section 143(1)(a)Section 154Section 71(2)Section 80A(1)Section 80CSection 80DSection 80GSection 80T

Gains of Rs. 1,02,52,055/- of the same year in the absence of any specific sequence of set-off provided under section 71(2) of the Act. 3. The Income Tax filing system cannot hinder Taxpayer's rebate / setoff claim of the Business Loss with the Short Term ... deduction under chapter VIA of Rs.1,93,000./- is thus correctly claimed by the assessee. 3.1 It was also submitted that, as per section 71(2), there is no order prescribed for set off of losses and therefore option is available with assessee to set off the derivative loss against

Incline Realty Pvt Ltd, Mumbai vs. DCIT, Central Circle -4(1), Mumbai

ITA 112/MUM/2025[2015-16]Status: DisposedITAT Mumbai11 Jun 2025AY 2015-16

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Vijay MehtaFor Respondent: Ms. Vranda Matkari
Section 143(3)Section 250Section 36(1)(iii)

there would have been no change in the final outcome. Instead of inter-head set off of business loss with Capital Gains under Section 71(2) of the Act, the income from purchase/sale of investment would offset the interest expenses debited to Profit & Loss Account. Accordingly, we accept Assessee

Nikhil Khandelwal, Kota vs. ITO WD-2(2), Kota

In the result, the appeal of the assessee is allowed

ITA 1291/JPR/2024[2022-23]Status: DisposedITAT Jaipur03 Jun 2025AY 2022-23

Bench: The Hearing.”

For Appellant: Sh. Anoop Bhatia, CAFor Respondent: MS. Harshita Chauhan, JCIT-DR
Section 143(1)Section 154Section 71

creating the demand is also not correct. To support that contention he relied upon the provision of section 71(2) and 71(3A) of the Act stated that the beneficial the provisions as applicable should be applied and thereby the claim of the assessee to seek the adjustment of loss ... under the head from income from house property against their income under the head capital gain is in accordance with the provisions of section 71(2) of the Act. Even ld. CIT(A) has stated that “That is, the income from Capital Gains shall be adjusted against the losses under

Falguni S. Mehta, Ahmedabad vs. The ITO, Ward-1(2)(1), Vadodara

In the result, the appeal of the assessee is allowed

ITA 1603/AHD/2024[2015-16]Status: DisposedITAT Ahmedabad30 Jan 2025AY 2015-16

Bench: Shri Siddhartha Nautiyal & Shri Narendra P. Sinha

For Respondent: Shri S K Agal, Sr. DR
Section 143(3)Section 250Section 271(1)(c)

that such set-off of losses in the "futures and options" segment is eligible for set-off against capital gains in terms of section 71(2) of the Act. Further without prejudice to the above argument, even from the notice dated 06.12.2017 issued by the AO initiating penalty proceedings u/s.271 ... have heard the rival contentions and perused the material available on record. It will be useful to reproduce the relevant extract of section 71(2) of the Act, which reads as under: “Where in respect of any assessment year, the net result of the computation under any head of income

M/S Paramanand and Sons, Bengaluru vs. Income Tax Officer, Ward 5(2)(1), Bengaluru

In the result, the appeal of the assessee is allowed

ITA 2055/BANG/2024[2020-21]Status: DisposedITAT Bangalore28 Jan 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Years : 2020-21

For Appellant: Shri Ashok A Kulkarni, AdvocateFor Respondent: Shri Ganesh R Gale, Standing Counsel for Dept
Section 143(1)Section 154Section 71(2)

assessee in the set aside proceeding before the learned CIT(A) submitted that as per the provision of section 71(2) of the Act, the setting off of the business losses with income under the head capital gain are at the option of the assessee and it has exercised ... earned CIT(A) the assessee is in appeal before us. 9. The learned AR for the assessee before us argued that under Section 71(2) of the Act, the assessee has the discretion to decide whether to set off business losses against capital gains. The assessee consciously exercised this option

Income Tax Officer - 2(2)(1), Mumbai vs. Logical Properties Private Limited, Mumbai

Accordingly, Ground No.5 raised by the Revenue is dismissed

ITA 3261/MUM/2024[2018]Status: DisposedITAT Mumbai30 Dec 2024

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Ram Krishna KediaFor Respondent: Shri Dharmesh Shah
Section 143(3)Section 144BSection 250Section 68

Assessee was entitled to claim deduction for compensation of INR.25,00,000/- paid to the respective buyer as business loss. Further, as per Section 71(2) of the Act where the net result of computation under the head ‘Profits and Gains of Business or Profession’ is a loss

ITO, Ward- 17(4), New Delhi vs. Navya Securities Pvt. Ltd., New Delhi

ITA 5565/DEL/2017[2013-14]Status: DisposedITAT Delhi09 Dec 2024AY 2013-14

Bench: Ms.Madhumita Roy & Smt. Renu Jauhriincome Tax Officer Vs. M/S Navya Securities Pvt. Ward-17(4) Ltd., B-2, Jangpura Room No. 225D, Extension, Cr Building, I.P. Estate New Delhi – 110014 New Delhi -2 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Aaacn3106H Appellant .. Respondent

For Appellant: Sh. Ruchesh Sinha, AdvFor Respondent: Sh. Amit Katosh, Sr. DR
Section 143(3)Section 71(2)

share application money was forfeited by the said company and therefore, the assessee claimed loss on such share. 4. As per provision of Section 71(2) of the Act the assessee claimed the set-off of the said amount which was disallowed by the Ld. Assessing Officer with the observation

Heidelberg Cement India Ltd., Gurgaon vs. DCIT, Circle- 2, Gurgaon

In the result, appeal of the assessee is partly allowed

ITA 5823/DEL/2018[2014-15]Status: DisposedITAT Delhi15 May 2024AY 2014-15

Bench: Shri M. Balaganesh & Shri Anubhav Sharmaheidelberg Cement India Ltd, Vs. Dcit, 9Th Floor, Tower-C, Infinity Circle-2, Towers, Dlf, Cybercity, Gurgaon Gurgaon (Appellant) (Respondent) Pan: Aabcm2359J

For Appellant: Shri Harpreet Singh Ajmani, AdvFor Respondent: Mr. Waseem Arshad, CIT(DR)
Section 143(3)Section 71Section 74

intra-head adjustment and section 71 of the Act talks about inter head adjustments. It is pertinent to note that the provisions of section 71(2) of the Act comes with a rider - “subject to provision of this chapter”. Thus, it could be seen that section 71(2 ... year‟s business loss to be set off with current year‟s long term capital gain. However, as stated above, the provisions of section 71(2) are qualified by the expression -“subject to the provision of this chapter” which deals with aggregation of income and set off of losses

Aashirvad Villa Limited., Kolkata vs. ITO, Ward-4(3), Kolkata.

In the result, the appeal filed by the assessee bearing

ITA 1372/KOL/2023[2020-21]Status: DisposedITAT Kolkata13 Feb 2024AY 2020-21

Bench: Shri Rajesh Kumar & Shri Anikesh Banerjeei.T.A. No. 1372/Kol/2023 Assessment Year: 2020-2021 Aashirvad Villa Limited,.........................Appellant 21A, Belvedere Road, Kolkata-700027 [Pan: Aaecs6659N] -Vs.- Income Tax Officer,.................................Respondent Ward-4(3), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances By: Puja Somani, C.A., Appeared On Behalf Of The Assessee Shrip.P. Barman, Addl. Cit, Appeared On Behalf Of The Revenue Date Of Concluding The Hearing : February 13, 2024 Date Of Pronouncing The Order : February 13, 2024

Section 139(1)Section 143(1)Section 250Section 71Section 71(2)

loss in respect of house property and the business loss was duly adjusted with the capital gain, which was permitted under section 71(2) of the Act. Ld. A.R. further argued that the Revenue has contravened the proviso to section 143(1) of the Act and without giving reasonable opportunity

J B Advani and Company Private Limited, Mumbai vs. Assistant Commissioner of Income Tax, Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 2544/MUM/2023[2015-16]Status: DisposedITAT Mumbai01 Nov 2023AY 2015-16

Bench: Shri Pavan Kumar Gadalej.B Advani & Company Vs. Acit, Circle 2(2)(1), Pvt Ltd.,Ador House, 4Th Aayakar Bhavan, Floor, 6 K, Dubashmarg, Mumbai-400021. Kalghoda,Liongate,Fort, Mumbai-400001. Pan/Gir No. : Aaacj1966D Appellant .. Respondent

For Appellant: Shri. Paras Savla & Shri PratikFor Respondent: Shri.G.J.Ninawe.Sr. DR
Section 143(2)Section 143(3)Section 234DSection 244ASection 32Section 32(2)Section 70Section 71(2)

relevant assessment year, ignoring the fact J.B Advani & Company Pvt Ltd, Mumbai. that as per the provisions of section 32(2) read with section 71(2) of the Act, the unabsorbed depreciation of the earlier years stands on the same footing as the depreciation for the current year, and therefore

Aarti Sponge and Power Ltd., Raipur vs. Pr. Commissioner of Income Tax, Raipur - 1, Raipur

In the result, appeal of the assessee stands dismissed

ITA 78/RPR/2022[2014-15]Status: DisposedITAT Raipur06 Sept 2023AY 2014-15

Bench: SHRI RAVISH SOOD (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

For Appellant: Shri R. B. Doshi, CAFor Respondent: Shri S. K. Meena, CIT-DR
Section 14ASection 263

आयकर अपील"य अ"धकरण, रायपुर "यायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR "ी र"वश सूद

ACIT-5(1)(1), Mumbai vs. M/S. Essar Shipping Ltd., Mumbai

In the result, the appeal of the Revenue is allowed partly for In the result, the appeal of the Revenue is allowed partly for In the result, the appeal of the Revenue is allowed partly for statisti...

ITA 87/MUM/2023[2014-15]Status: DisposedITAT Mumbai31 Jul 2023AY 2014-15

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2014-15 Acit Circle 5(1)(1), M/S Essar Shipping Ltd., R. No. 568, Aayakar Bhavan, Essar House, 11, K K Marg, Vs. M.K. Road, Mumbai-400020. Mahalaxmi, Mumbai-400034. Pan No. Aacce 3707 D Appellant Respondent

For Appellant: Mr. Rishav PatawariFor Respondent: Mr. Mudit Nagpal, CIT-DR
Section 115VSection 36(1)

perused the relevant material on record. As far as dispute and perused the relevant material on record. As far as provisions of section 71(2) of the Act of section 71(2) of the Act are concerned, net result of the computation under any head computation under any heads ... other head except capital gain as per the provisions of section any other head except capital gain as per the provisions of section 71(2) of the Act. Since, Since, in the case of the current year lo current year losses under the head ‘income from head ‘income from other

Tata Digital Private Limited, Mumbai vs. DCIT- 1(3)(1), Mumbai

In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes

ITA 2334/MUM/2022[2020-21]Status: DisposedITAT Mumbai29 Dec 2022AY 2020-21

Bench: Shri Vikas Awasthy () & Shri Om Prakash Kant () Assessment Year: 2020-21 Tata Digital Private Limited, Central Processing Centre/The Army & Navy Building 148, M G Deputy Commissioner Of Income Road, Opposite Kala Ghoda Fort Vs. Tax 1(3)(1), Mumbai, Mumbai. Mumbai City-400 001 Pan No. Aahct 2205 N Appellant Respondent : Assessee By Mr. Sukhsagar Syal, Ar Revenue By : Mr. Ashish Heliwal, Dr : Date Of Hearing 14/11/2022 : Date Of Pronouncement 29/12/2022

For Respondent: Assessee by Mr. Sukhsagar Syal, AR
Section 143(1)Section 71

loss under the head profi under the head profits and gains from business and ts and gains from business and profession as per section 71(2) of the Aet and the same was profession as per section 71(2) of the Aet and the same was profession as per section