DCIT, NEW DELHI vs. SH. ASHISH DHAWAN, NEW DELHI

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ITA 1142/DEL/2016Status: DisposedITAT Delhi05 August 2019AY 2010-116 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) allowed the set off, holding that appellate authorities can allow claims based on facts on record even if not initially claimed. The Tribunal upheld this, finding no infirmity in the CIT(A)'s order.

What were the facts?

The assessee sought to set off a short-term capital loss from AY 2009-10 against short-term capital gains in AY 2010-11. The Assessing Officer (AO) disallowed this as it was not claimed in the original return of income.

What were the issues?

Whether an appellate authority can allow a claim for set off of capital loss if it was not claimed in the original return of income but the facts are on record.

Which sections of the Income-tax Act were involved?

Section 74

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DELHI BENCHES “D” : DELHI

Before: SHRI BHAVNESH SAINI & SHRI R.K. PANDA

Hearing: 01.08.2019Pronounced: 05.08.2019

For Revenue : Shri Naina Soin Kapil, Sr. DR For Assessee: Shri Sumit Mangal & Ms. Rashi Gupta, Advocates Date of Hearing : 01.08.2019 Date of Pronouncement : 05.08.2019 ORDER PER BHAVNESH SAINI, J.M.

This appeal by Revenue has been directed against the Order of the Ld. CIT(A)-28, New Delhi, Dated 07.12.2015 for the A.Y. 2010-2011 on the following ground :

“Whether the Ld. CIT(A) on the facts and circumstances of the case and in law also, has erred in allowing the set off of short term capital

2 ITA.No.1142/Del./2016 Shri Ashish Dhawan, New Delhi. loss of A.Y. 2009-10 amounting to Rs.2,07,98,279/- with the short term capital gain earned during the A.Y. 2010-11 despite the fact that the assessee has not claimed it in his return of income.”

2.

Briefly the facts of the case are that assessee challenged the action of the A.O. in not allowing the set off of short term capital loss for the A.Y. 2009-2010 amounting to Rs.2,07,98,279/- with the short term capital gain earned during the assessment year under appeal. The assessee submitted before the Ld. CIT(A) that A.O. has erred in not allowing set off of short term capital loss of the impugned amount in assessment year under appeal although all the conditions prescribed under the provisions of Section 74 of the Act have been duly complied with by the assessee. It was further stated that only reason for not allowing the same is that in the original return of income the assessee failed to claim the same and the same was only claimed during assessment proceedings. Accordingly, the same was rejected relying upon decision of Hon’ble Supreme Court in 3 ITA.No.1142/Del./2016 Shri Ashish Dhawan, New Delhi.

the case of Goetze (India) Ltd., vs. CIT [2006] 284 ITR 323 (SC). It was further stated that in the case under consideration no fresh claim was made, but, the A.O. was requested to complete the assessment as per the provisions of the Act on the basis of the facts available on record. The assessee relied upon Judgment of Hon’ble Supreme Court in the case of CIT vs. Mahalaxmi Sugar Mills AIR 1986 AIR 2111 in which it was held that “it is duty of the A.O. to apply the relevant provisions of the Act for the purpose of determining the true figures of assessee’s taxable income.”

4.

The Ld. CIT(A) considering the case of assessee and noted that since no fresh claim have been made by the assessee as all the facts are available on record, the Ld. CIT(A) allowed the claim of assessee. The operative portion of the Order of the Ld. CIT(A) in para 3.1 is reproduced as under :

“3.1. Further in the case under consideration specific finding has been given in the assessment order that by virtue of the provision of section 74 of the Act the assessee is entitled for the set off of STCG

4 ITA.No.1142/Del./2016 Shri Ashish Dhawan, New Delhi. with the brought forward STCL . Considering above and since the Appellate Authorities have the power to allow deduction/claim for expenditure to assessee to which he was otherwise entitled, even though no claim was made by the assessee in the return as held by the Hon’ble Bombay high court in the case of CIT v. Pruthvi Brokers & Shareholders Pvt. Ltd.[ 349 ITR 336 (Bombay) and Commissioner of Income Tax v. Jai Parabolic Springs Ltd. [3] 306 ITR 42 (Delhi). Accordingly the A.O is directed to allow the set off of short term capital loss of FY 2008-09 (A.Y 2009-10) amounting to Rs. 2,07,98,279/ with the short term capital gain earned during the FY 2009- 10 (AY 2010-11) . The appellant will get the necessary relief”.”

5.

We have heard the Ld. D.R. The Ld. D.R. submitted that A.O. could not have allow the claim of assessee because no revised return is filed and relied Judgment of Hon’ble Supreme Court in the case of Goetze

5 ITA.No.1142/Del./2016 Shri Ashish Dhawan, New Delhi.

(India) Ltd., vs. CIT (supra). The Ld. A.R. submitted that the appellate authorities have power to entertain the claim of assessee based on the facts available on record and, therefore, there is no infirmity in the order of the Ld. CIT(A) in allowing the claim of assessee.

6.

We have considered the rival submissions. The Ld. CIT(A) noted that specific finding have been given in the assessment order that by virtue of provisions of Section 74 of the Act, the assessee is entitled for the set off of STCG with brought forward STCL. Thus, the claim of assessee on merit is not in dispute and even no ground of appeal

have been raised on merit that assessee has not been entitled for the set off of loss as claimed. The grievance of the Revenue has been that assessee has not made the claim on the return of income and no revised return have been filed. The Hon’ble Delhi High Court in the case of CIT, Delhi-II vs. Jai Parabolic Springs Ltd., [2008] 306 ITR

42. (Del.) considering the Judgment of Hon’ble Supreme Court in the case of Goetze (India) Ltd., vs. CIT (supra) held as under :

6 ITA.No.1142/Del./2016 Shri Ashish Dhawan, New Delhi.

“Held, dismissing the appeal, that there was no prohibition on the powers of the Tribunal to entertain an additional ground which according to the Tribunal arose in the matter and for the just decision of the case. There was no infirmity in the order of the Tribunal.”

6.1. In view of the above, we do not find any infirmity in the Order of the Ld. CIT(A) in allowing the claim of assessee.

7.

In the result, appeal of Department dismissed.

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