Provisions of section 50C on sale of an asset

IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad SMC Bench, Hyderabad
(Through Video Conferencing)
Before Smt. P. Madhavi Devi, Judicial Member
ITA No.377/Hyd/2018
Assessment Year: 2009-10

M/s. Chandana
Constructions (P) Ltd,
D.No.1-1-23-/11/2 Vivek
Nagar, Chikkadapalli
Hyderabad 500020
PAN:AAACC8227A

vs

Income Tax Officer
Ward 1(4)
Hyderabad

Assessee by: N o n e
Revenue by: Sri Waseem-ur-Rehman,DR
Date of hearing: 03/08/2021
Date of pronouncement: 30/08/2021
ORDER

This appeal has been coming up for hearing from 18.5.2018 onwards and the assessee is represented by his Counsel Mr.P.S.S. Kailash Nath, who appeared on some occasions. The last appearance was on 2.12.2020. Thereafter, the Bench did not function and on 8.3.2021, since none appeared for the assessee, a notice was sent to the assessee through RPAD. Further, notices were also sent to the assessee by RPAD and final notice for hearing today i.e. 3.8.2021 has also been served on the assessee.

2. Even on merits of the issue, I find that the Assessing Officer had applied the provisions of section 50C on sale of an asset and thereafter allowed set off of business loss from the Short Term Capital Gain arising therefrom. Subsequently, he observed that the business loss was wrongly set off from short term capital gain even though the same was not allowable u/s 72 of the Act. Therefore, he issued notice u/s 154 of the Act for rectification of the mistake. And after considering the assessee’s submissions, the Assessing Officer brought to tax the brought forward business loss which was reduced from STCG.

3. I find that the assessee itself has offered the income under the head “Short Term Capital Gain” and not as business income. Therefore, under the provisions of section 72(1), the brought forward business loss can be set off only from business income and cannot be set off from STCG. The assessee has not ben able to controvert this find of the lower authorities. Therefore, the assessee’s appeal is dismissed on merits as well.

4. In the result, assessee’s appeal is dismissed.
Order pronounced in the Open Court on 30th August, 2021.

Please find attached the enclosed file for the full judgement