SHRI. NARENDRANATH MEHRA ,MUMBAI vs. ITO WARD 3(2)(4), MUMBAI

Grievances raised by the appellant are as follows:-

The orders passed by the learned lower authorities is bad in law & bad in facts.

2. The intimation issued by the learned AO is ab-initio void, inasmuch as after 01.06.1999, no adjustment/varation to returned income can be made, in the proceedings u/s 143(1) of the I.T Act, 1961. 3. The learned lower authorities have grossly erred in ignoring business loss on account of future & option trading at Rs. 11,01,917 and have further erred in adding said sum to the returned income without giving an opportunity of being heard. 4. The learned Commission of Income Tax (Appeals) has grossly erred in holding that that Colum No. 51 of ITR. 04 is exclusively meant for returning profit on presumptive basis though no such exclusivity is discernable from the said form.

The assessee before us is an individual deriving income from house property, business income, capital gains and income from other sources. The assessee had claimed a business loss of Rs. 11,01,917/- on “Future and options trading” and a net total income of Rs. 9,80,920/-. In the course of processing of this return, however, loss of Rs. 11,01,917/- was declined to the assessee. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. The assessee is not satisfied and is in further appeal before me.

I have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position.

I find that section 143(1)(a) permits, adjustments, namely, for (i) any arithmetical error in the return; and (ii) an incorrect claim if such incorrect claim is apparent from any information in the return. Given that it is not a case of arithmetic error, the impugned adjustment can, therefore, be sustained only when it can be said to be incorrect claim apparent from any information in the return. I find that in schedule CYLA of the income tax, return, as uploaded, shows business loss of Rs. 11,01,917/- claimed for set off, and this loss set off has been declined during the processing. Such a summary disposal of set off of loss, in my understanding, is not envisaged under section 143(1) of the Act. As for the limited disclosure in column 51 as pointed out by the learned CIT(A), one has to understand that limitations of what is permitted to be disclosed in a column cannot be put against the assessee. When a summary dismissal of a claim is made which cannot even be appealed on merits, it can only be so done when it is conclusively inadmissible on the basis of information on record. In my considered view, therefore, the impugned disallowance of set off of loss of Rs. 11,01,917/- on account of trading in futures and options could not have done in such a summary manner. I, therefore, delete the impugned adjustment. The assessee gets the relief accordingly. In the result, the appeal is allowed. Pronounced in the open court today on the 10th 7. day of March 2022. Sd/- Pramod Kumar (Vice President) Mumbai, dated the 10th day of March 2022.