Brought Forward Business Loss Can Be Setoff Against Capital Gains On Sale Of Business Assets

Last updated: 24 August 2021
Quick Summary
The Karnataka High Court has ruled that brought forward business losses can be set off against capital gains arising from the sale of business assets. This decision clarifies that even if the gain is taxed under the 'capital gains' head, its inherent business character allows for the set-off. The court disagreed with the Special Bench of the Tribunal, reaffirming that income's nature doesn't change simply because it's assessed under a different tax head.

Court :
Karnataka High Court

Brief :
The Hon'ble Karnataka High Court in matter of Nandi Steels Limited Vs. ACIT approved setoff of brought forward losses against capital gains on sale/transfer of business assets of the assessee under provisions of Section 72 of the Income Tax Act,1961.

Citation :
Nandi Steels Limited Vs. ACIT

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