RAKESH KUMAR PANDITA,DELHI vs. ACIT CIRCLE-24(1), NEW DELHI

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] – 8, New Delhi dated 14.06.2019 pertaining to assessment year 2012-13.

The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in not allowing the adjustment of current year losses with income under section 115BBD of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short].

Briefly stated, the facts of the case are that the appellant company filed its return of income on 14.09.2012 declaring an income of Rs. 26,26,860/-. The same was processed by the CPC, Bangalore u/s 143(1) of the Act and the assessed income was Rs. 31,51, 660/–.

The assessee moved an application for rectification of error in the computation of assessed income while processing the same by CPC, Bangalore.

The mistake which was pointed out was that though the loss of current year adjusted was mentioned in the intimation u/s 143 (1) by the CPC at Rs. 22,53,768/- but the same was not adjusted while computing the assessed income. Since there was mistake apparent from record, the assessed sought rectification u/s 154 of the Act.

The claim of the assessee was dismissed by the Assessing Officer who was of the opinion that since the assessee has declared income u/s 115BBD of the Act and calculated the tax at special rate of 15%, therefore, the same cannot be set off against losses. Application under section 154 of the Act was rejected.

The assessee carried the matter before the ld. CIT(A) and reiterated its claim of set off.

The CITA was of the opinion that whether current year loss can be set off from the income declared under section 115BD of the Act is a highly debatable issue and a debatable issue cannot be rectified u/s 154 of the Act.

Before me, the learned counsel for the assessee reiterated what has been stated before the lower authorities. It is the say of the ld. counsel that due to inadvertent mistake, the assessee could not file complete details in the return of income which was processed by CPC, Bangalore. The ld. counsel for the assessee vehemently stated that the amount of current year loss has been specifically mentioned in the intimation u/s 143(1) of the Act received from CPC, Bangalore.

Per contra, the ld. DR strongly supported the order of the first appellate authority.

I have given thoughtful consideration to the orders of the authorities below. It is true that in the intimation u/s 143(1) of the Act, loss of the current year has been mentioned at Rs. 22,53,768/–. It is equally true that the assessee has returned income in respect of dividend received from a foreign company u/s 115BBD of the Act.

As per clause (2), no deduction in respect of any expenditure or allowance should be allowed to the assessee under any provision of this Act in computing its income by way of dividends referred to in sub- section (1). Now, the interpretation of ‘expenditure’ or ‘allowance’ to cover current year loss is, in my considered opinion, a highly debatable issue and no precedences have been made available to me. Therefore, in these circumstances, I have no hesitation in upholding the findings of the ld. CIT(A). Ground raised by the assessee is dismissed.

In the result, the appeal filed by the assessee in is dismissed.