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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
O R D E R PER M BALAGANESH, AM:
This appeal in A.Y. 2006-07 arise out of the order by National Faceless Appeal Centre (NFAC), Delhi, [the learned CIT (A)] dated 26th November, 2021 against the order of assessment passed under Section 143(3) read with section 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘Act’) dated 31st December, 2013, by learned Income Tax Officer, Ward - 3(1)(2), Mumbai (hereinafter referred to as learned AO).
The Ground No.1 raised by the assessee is challenging the validity of reassessment u/s 147 of the Act.
The assessment for AY 2006-06 was sought to be reopened by issuance of notice u/s 148 of the Act dated 20.03.2013 after duly recording the reasons for reopening the assessment which are reproduced as under:
“In this case order u/s. 143(3) was completed on 26.12.2008 on total income of Rs 7.38,660/- after setting off brought forward loss of Rs 26,41,870/- which included brought forward speculation loss of Rs 16,31,177/ As per the Return of income filed by the assessee refer sch1 computation of income), it is seen that the assessee has shown net profit from business at Rs 33,74,318/- (col. 1) and speculation profit included in it at Nil (col 2). As per sec.73, the assessee can adjust brought forward speculative loss only against speculative income. There was no speculative income during the year and the assessee has wrongly claimed set off of brought forward i. Incorrect assumption of fact that assessee is not having speculation profit in the year under consideration; and
Hence, we have no hesitation in quashing the reassessment proceedings as void abinitio. Accordingly, the Ground No.1 raised by the assessee is allowed.
Since reopening is quashed, the other grounds raised by the assessee on merits need not be gone into as they become academic in nature.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 31.05.2022.