GAURABH SARAOGI, L/H OF MAHENDRA KUMAR SARAOGI,KOLKATA vs. DCIT, CIRCLE - 23(1), HOOGHLY

आयकर अपील�य अ�धकरण, कोलकाता पीठ “बी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: KOLKATA �ी राजेश कुमार, लेखा सट�य एवं �ी �द�प कुमार चौबे, �या�यक सद�य के सम� [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T.(S.S).A. No. 21/Kol/2025 Assessment Year: 2012-13 Gaurabh Saraogi, L/H of Mahendra Vs. DCIT, Circle- 23 (1), Hooghly Kumar Saraogi

(PAN: AJFPS 9829 P) ( अपीलाथ� ) Respondent / ��यथ� Appellant / Date of Hearing / सुनवाई 13.05.2025 क� �त�थ Date of Pronouncement/ 30.06.2025 आदेश उ�घोषणा क� �त�थ For the assessee / Shri S. M. Surana, Advocate �नधा�रती क� ओर से Shri Sunil Surana, CA

For the revenue / राज�व Shri P. N. Barnwal, CITDR क� ओर से

ORDER / आदेश Per Pradip Kumar Choubey, JM:

This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeals), -21, Kolkata (hereinafter referred to as the Ld. CIT(A)] dated 23.12.2024 for AY 2012-13.

2 I.T.(S.S).A. No. 21/Kol/2025 Assessment Year: 2012-13 Gaurabh Sarogi, L/H of Mahendra Kumar Saraogi 2. Brief facts of the case of the assessee are that the assessee filed return of income for AY 2012-13 declaring total income of Rs. 11,39,306/-. A search was conducted are the business premises of the assessee, the AO issued notice u/s 153A, in response to the said notice, the assessee filed return and also filed all the evidences in compliance to the notice u/s 143(2) of the Act. The AO did not consider the submission and added Rs. 7,88,000/- u/s 50C(1) of the Act.

Being aggrieved and dissatisfied the assessee preferred an appeal before us.

We have gone through the order passed by the Ld. CIT(A), it appears to us that the Ld. CIT(A) has dismissed the appeal of the assessee on the ground that the set off of

3 I.T.(S.S).A. No. 21/Kol/2025 Assessment Year: 2012-13 Gaurabh Sarogi, L/H of Mahendra Kumar Saraogi long- term capital loss was not made in the original return of income, cannot be raised in the return filed u/s 153A of the Act. It is undisputed fact that the assessee had brought forward long term capital loss of Rs. 5,18,102/- for AY 2011-12 which was not claimed in the original return but in the return u/s 153A.

Going over the Section 153A of the Act, it is clear that when a return is furnished u/s 153A by the assessee it takes place return filed u/s 139 of the Act. Our attention has been drawn by the judgment of Hon’ble Gujarat High Court in the case of Kirti Dahyabhai Patel vs. ACIT [ 2015] 280 CIT 216, held thus:

“In view of the specific provision of Section 153A of the Act, the return of income filed in response to notice u/s 153A of the Act is to be considered as a return filed u/s 139 of the Act, as the AO has made an assessment on the said return ad therefore, the return is to be considered for the purpose of penalty u/s 271(1)(c ) of the Act and the penalty is to be levied on the income assessed over and above the income returned u/s 153A, if any, Thus it is clear that when the AO has accepted the revised return filed by the assessee u/s 153A, no occasion arises to refer to the previous return filed u/s 139 of the Act. For all purposes, including for the allowability of brought forward losses, the return that has to be looked at is the one filed u/s 153A.” 7. Irrespective of the above facts, we have gone through the order passed by the Hon’ble Madras High Court in the case of Kanaka Films Pvt. Ltd. (supra) wherein it has been held thus:

“19. So also, while considering a similar question, the Supreme Court in the case of CIT v. Manmohan Das [1966] 59 ITR 699, held as under at p. 702: "The second question presents little difficulty. In making his order of assessment for the year 1950-51, the Income-tax Officer declared that the loss computed in that year could not be carried forward to the next year under section 24(2) of the Income-tax Act, as it was not a business loss. The Income-tax Officer has, under section 24(3) to notify to the assessee the amount of loss as computed by him, if it is established in the course of assessment of the total income that the assessee has suffered loss of profits. Section 24(2) confers a statutory right (subject to certain conditions which are not material) upon the assessee who sustains a loss of profits in any BHFE year in any business, profession or vocation to carry forward the loss as is not set off under sub-section (1) to the following year, and to set it off against his profits and gains, if any, from the same business, profession or vocation for that year, whether the loss of profits or gains in any year may be carried forward to the following year and set off against the profits and gains of the same business, profession or vocation under section 24(2) has to be determined by the Income-tax Officer who deals with the assessment of the subsequent year. It is for the Income-tax Officer dealing with the assessment in the subsequent year to determine whether the loss of the previous year may be set off against the profits of that year. A decision recorded by the Income-tax Officer who computes the loss in the previous year under section 24(3) that the loss cannot be set off against the income of the subsequent year is not binding on the assessee."

4 I.T.(S.S).A. No. 21/Kol/2025 Assessment Year: 2012-13 Gaurabh Sarogi, L/H of Mahendra Kumar Saraogi 20. In view of the above legal position, if once the loss is determined by the Income-tax Officer he is duty bound to carry forward and set off the loss of the earlier years in the subsequent years. According to the facts in the present case, after the passing of the order of the Tribunal on July 31, 1978, the Income-tax Officer has given effect to the said order of the Tribunal on September 30, 1978. In the consequential order, the Income-tax Officer determined the loss. Thereafter, it is not open to the Income-tax Officer determined the loss. Thereafter, it is not open to the Income-tax Officer to say that he cannot carry forward and set off the business loss already determined by him in subsequently assessment years. The Income-tax Officer is duty bound to rectify the assessments already completed by him after the Appellate Tribunal rendering its order on July 31, 1978. Thus, considering the facts appearing in this case in the light of the judicial pronouncements cited supra, we hold that the petitioner is entitled to carry forward and set off the business loss as prayed for in these writ petitions. In that view of the matter, the respondent herein is directed to carry forward the unabsorbed business loss of Rs. 18,041 and set off the same against the business income of the petitioner in the assessment years 1970-71 and 1971-72. In accordance with law.” 8. In the present case, it is undisputed facts that the assessee had brought forward long- term capital loss of Rs. 5,18,102/- for AY 2011-12. Keeping in view above decision as well as considering the facts of the case, we find substance in the argument of the ld. Counsel of the assessee is that brought forward loss was mandatorily allowable to the assessee. Accordingly, the appeal of the assessee is hereby allowed and the addition made by the AO confirmed by the Ld. CIT(A) is hereby deleted.

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

Order is pronounced in the open court on 30th June, 2025

Sd/- Sd/-

(Rajesh Kumar/राजेश कुमार) (Pradip Kumar Choubey /�द�प कुमार चौबे) Accountant Member/लेखा सद�य Judicial Member/�या�यक सद�य Dated: 30th June, 2025 SM, Sr. PS

Copy of the order forwarded to: 1. Appellant- Gaurabh Saraogi, L/H of Mahendra Kumar Saraogi, CF 169, salt Lake City, Kolkata- 700064 2. Respondent – DCIT, Circle-23(1), Hooghly

5 I.T.(S.S).A. No. 21/Kol/2025 Assessment Year: 2012-13 Gaurabh Sarogi, L/H of Mahendra Kumar Saraogi 3. Ld. CIT(A)-21, Kolkata 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail)