GWL PROPERTIES LTD.,KANCHIPURAM vs. ITO, CORP. CIRCLE-1(1), CHENNAI

The assessee is a company and filed the return of income for AY 2009- 10 on 27.09.2009 declaring total income of Rs. 2,49,01,762/- and current year

The Ld. Authorized Representative (AR) of the assessee submitted that the assessee while filing the return of income has set off the current business loss against the total income whereby the tax payable was arrived at Rs. 32,43,787/-. The Ld. AR further submitted that the assessee after setting off the TDS of Rs. 54,52,508/- had claimed a refund of Rs. 22,08,921/-. The Ld. AR also submitted that the assessee however in the schedule disclosing the business loss has inadvertently failed to specify the amount as to be set off against the total income due to which while processing the return u/s. 143(1) of the Act, the loss was not set off which resulted in the tax demand of Rs.41,91,610/-. The Ld. AR drew our attention to the findings of the CIT(A) where the CIT(A) has not disputed the facts as contended by the assessee. The relevant extract from the order of the CIT(A) is as given below: “6.2.1 During the appellate proceedings, the appellant has furnished detailed written submissions and relevant schedules in support of its contention. It has been explained that the current year business loss of Rs. 1,52,19,691/- was duly disclosed in Schedule CYLA under the head "Loss to be adjusted," but due to an inadvertent clerical omission, the said figure was not entered in column 3(v), which specifies the income

The Ld. AR further drew our attention to the observations of the A.O while dismissing the order u/s. 154 of the Act where the AO has specifically stated that the fresh claim made by the assessee can only be allowed by the appellate authorities. The Ld. AR accordingly argued that the CIT(A) is not correct in rejecting the claim of the assessee stating that it is a claim made otherwise than by filing the revised return.

The Ld. Departmental Representative (DR), on the other hand, relied on the orders of the lower authorities.

We have heard the parties and perused the material available on record. From the perusal of the orders of the lower authorities, we notice that the set off of business loss was not allowed because in the return of income the assessee has not made the claim. However, we notice from the relevant part of the return of income as extracted hereinabove that the assessee has disclosed the loss in Schedule-CYLA but has failed to disclose the same in Schedule-BFLA. We further notice that this fact has not been disputed by the CIT(A) but the CIT(A) has denied the claim by placing reliance on the decision of Hon’ble Supreme Court in the case of Goetz India (Supra). However, it is clear from the facts stated hereinabove that the set off of loss is not a fresh claim made by the assessee but is an inadvertent error while the filing the return of income. Therefore, in our considered view the claim of set off cannot be denied to the assessee and we direct the A.O to allow the set off.

In the result, the appeal of the assessee is allowed. Order pronounced on 08th day of September, 2026 at Chennai.