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Date of Hearing : 06.08.2019 Date of Pronouncement : 06.08.2019 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by revenue is directed against the order of ld. Commissioner (Appeals)-51, Mumbai, dated 02.05.2018 for Assessment Year 2014-15.
The revenue has raised the following ground of appeal:
1. “On the facts and in the circumstances of the case and in law, the ld. Commissioner (Appeals) erred in restoring the issue of allowance of Short Term Capital Loss within the meaning of section 94(7) of the Act, back to the AO, in contravention with the provisions of section 251(1) of the Act.”
Brief facts of the case are that assessee filed his return of income for Assessment Year 2014-15 on 30.07.2014 declaring income of Rs. 2,90,79,860/-. In the return of income, the assessee offered Short Term Capital Loss (STCL) of Rs. 49,09,645/- on account of sale of share and carry forward the same to the subsequent year. During the assessment, the Mum 2018-Shri Kamal Khetan assessee stated that due to oversight, the assessee had not adjusted loss from dividend stripping of Rs. 1.60 crore as per section 94(7) of the Act.
The assessee filed revised computation of total income and claimed STCL to be carry forward for next year amounting to Rs. 2.09 crore instead of Rs. 49.0 lakhs (approx) claimed earlier. The contention of assessee was not accepted by Assessing Officer by taking view that as per the decision of Hon’ble Supreme Court in Goetze India Ltd. Vs. CIT (284 ITR 323) that no claim of deduction can be made in course of assessment proceeding other than made in the return of income and that the assessee has not filed revised return. On appeal before the ld. Commissioner (Appeals), the action of Assessing Officer was reversed. The ld Commissioner (Appeals) directed the assessing officer to verify the fact and allow the revise claim. The ld. Commissioner (Appeals) while reversing the action of Assessing Officer relied upon the decision of Hon’ble Bombay High Court in CIT vs. Pruthvi Brokers & Shareholders Pvt. Ltd. [349 ITR 336 (Bom)]. The ld. Commissioner (Appeals) also held that Assessing Officer has not disputed the merit of the claim, however, the claim was not allowed as the same was not made by way of revised return of income. Aggrieved by the order of ld. Commissioner (Appeals), the revenue has filed the present appeal before us.
We have considered the submission of ld. Departmental Representative (DR) for the revenue and ld. Authorized Representative (AR) of the 2 Mum 2018-Shri Kamal Khetan assessee and perused. The ld. DR for the revenue supported the order of Assessing Officer. The ld. DR for the revenue vehemently submitted that the Assessing Officer acted within his jurisdiction as the assessee has not filed revised return of income within the period prescribed under the Act.
The Assessing Officer has no jurisdiction to accept the revised computation in absence of revised return of income.
On the other hand, the ld. AR of the assessee supported the order of ld. Commissioner (Appeals). The ld. AR of the assessee further submits that though the Assessing Officer is not entitled to consider the claim in absence of revised return. However, the powers of Appellate Authority are not restricted to consider the additional claim and to adjudicate the same. The ld. Commissioner (Appeals) accepted the contention raised by assessee by following the decision of jurisdictional High Court in CIT vs. Pruthvi Brokers & Shareholders Pvt. Ltd. (supra) and accepted the contention of assessee that due to oversight, the assessee had not added the loss on account of the dividend stripping of Rs. 1.60 crore from the STCL and hence showed the loss to be carried forward as Rs. 49.09 lakhs only. The ld Commissioner (Appeals) rightly exercising the power of appellate authority admitted the revised claim of the assessee and directed the assessing officer to verify the facts and grant the relief to the assessee.
There is no infirmity in the order passed by the learned Commissioner (Appeals). 3 Mum 2018-Shri Kamal Khetan
We have considered the submission of both the parties and perused the material available on record. It is not in dispute that while filing the return of income, the assessee claimed STCL of Rs. 49.09 lakhs only on account of sale of shares and carry forward the same for subsequent year. During the assessment the assessee filed revised computation and claimed that due to inadvertence, the assessee has not considered the loss of Rs. 1.60 crore on account of dividend stripping and the section 94(7) of the Act is not applicable in his case as he held the said shares/ scrips for more than 3 month prior to the record date. The assessee raised this contention before the Assessing Officer. The Assessing Officer not accepted by taking his view that such claim can only be accepted by way of revised return of income. However, during the first appeal, the ld. Commissioner (Appeals) by following the decision of jurisdictional High Court in CIT vs. Pruthvi Brokers & Shareholders Pvt. Ltd. (supra) accepted the revised computation of assessee. The ld Commissioner (Appeals) also considered the facts that the Assessing Officer has not disputed that share of Stride Aircolab Ltd. have been held beyond three months of the record and therefore, the provision of section 94(7) are not attracted.
We have further noted that ld. Commissioner (Appeals), despite holding that this fact of holding period of the alleged scripts were not disputed by Assessing Officer in all his fairness, directed the Assessing Officer to verify the fact and allowed the revised claim of STCL. Therefore, we do 4 Mum 2018-Shri Kamal Khetan not find any violation of provisions of section 25(1) of the Act. No contrary fact or law is brought to our notice to take any contrary view.
Therefore, we do not find any merits in the grounds of appeal raised by revenue.
In the result the appeal of the revenue is dismissed.
Order pronounced in the open court on 06/08/2019,while hearing the appeal.