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Facts
The assessee declared short-term capital gain which was set off against brought forward short-term capital loss. The assessment order accepted this set-off. However, a subsequent demand notice was issued for Rs. 8,62,438/-, which was not in sync with the assessment order.
Held
The Tribunal found that the demand raised was not in accordance with the assessment order. The appeal was allowed for statistical purposes, and the matter was restored to the Assessing Officer for recalculation.
Key Issues
Whether the demand raised by the tax authorities was in consonance with the assessment order, considering the set-off of brought forward capital loss.
Sections Cited
147, 250, 143(3), 54F, 144B, 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN & HON’BLE SHRI PRABHASH SHANKAR
Date of Hearing 30.06.2025 Date of Pronouncement 03.07.2025 आदेश / ORDER
PER SANDEEP GOSAIN, JM:
1. The present appeal has been filed by the assessee challenging the impugned order dt. 02.04.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2014-15.
Ground No. 1, raised by the assessee relates to challenging the order Ld. CIT(A) in passing the order without taking into consideration the actual facts of the present case. In this regard, we have heard the counsels for both the parties, perused the material placed on record and the orders passed by the revenue authorities.
From the facts of the present case, we noticed that the assessee had declared short term capital gain of Rs. 9,18,303/- which according to him was set off against the brought forward short term capital loss of Rs. 15,74,129/- relating to A.Y 2008-09, as the unabsorbed short term capital loss for the A.Y 2008-09 and subsequently assessment year was carried forward as per table below: Unabsorbed Short term capital A.Y B/fd Set off To be c/f 2008-09 15,74,129 9,18,303 6,55,826 2011-12 7,924 0 7,924 2012-13 5,74,313 0 5,74,313 2013-14 4,28,211 0 4,28,211
The return of the assessee was taken up for scrutiny and order u/s 143(3) of the Act was passed on 31-12-2016 and the returned income was accepted along with the claim of the set off of the current years short term capital gain with the brought forward short term capital loss.
As per the assessment order passed u/s 143(3) thereby determining the income of the assessee at Rs. 97,08,150/- and the final remarks were as under;-
" Assessed u/s. 143(3) of the Income-tax Act, 1961. Give credit for taxes paid as per proof on record. Charge Interest u/ s.234A, 234B and 234C as applicable. ITNS 150 forms part of this order. Issue Demand/ Refund order, as applicable."
However, the assessment of the assessee was then reopened u/s 147 of the Act on 31/7/2022 to examine the claim of the set off of long term capital gain on sale of a commercial property with the purchase of a residential property u/s 54F. This claim was accepted in the order passed u/s 147 r.w.s. 144B dated 17/02/2023. Hence the returned income was again accepted at Rs. 9,18,303/-.
But still a demand notice was issued raising a demand of Rs. 8,62,438/- which as per the tax computation sheet shows to be a demand on the short term capital gain of Rs. 9,18,303/- along with interest.
Accordingly assessee submitted that the tax computation sheet is not in sync with the assessment order and the demand of Rs.8,62,438/- has been wrongly raised though the short term capital loss has been set off as per the assessment order.
Since, this demand of Rs. 8,62,438/- is only in the tax calculation sheet and is not in accordance with the final order passed by the AO u/s 143(3) of the Act.
Therefore, after having gone through the previous return forms, we noticed that in the year under consideration there is no justification in not setting off the short term capital gain of the current assessment year against the brought forward short term capital loss of the previous years.
Therefore taking into consideration the entire facts and circumstances of the present case, we are of the view that the order passed by the Ld. CIT(A) is set aside and is restored back to the file of AO with a direction to recalculate the same in accordance with the orders passed u/s 143(3) of the Act. Needless to mention that before passing any order opportunity of hearing be also provided to the assessee. The assessee shall not seek unnecessary adjournments.
Before parting, we make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the AO independently in accordance with law. Since, we have restored the matter back to the file of AO therefore other grounds are not adjudicated as the same are now academic.
In the result, the appeal filed by the assessee is allowed for statistical purposes Order pronounced in the open court on 03.07.2025.
Sd/- Sd/- (PRABHASH SHANKAR) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 03/07/2025 KRK, Sr. PS आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / The CIT(A) 3. आयकर आयु�(अपील) / Concerned CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, मु�बई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, स�ािपत �ित //True Copy//
उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु�बई मु�बई / ITAT, Mumbai मु�बई मु�बई