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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI C.N. PRASAD & SHRI RAJESH KUMAR
Per Rajesh Kumar, Accountant Member:
The present appeal has been preferred by the assessee against the order dated 10.03.2014 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2011-12.
The only issue raised by the assessee is against the order of Ld. CIT(A) upholding the order of AO not allowing the setting off of business loss amounting to Rs.68,35,770/- against the income from long term capital gain of Rs.26,816/-
The facts in brief are that the assessee filed return of income under section 139(1) of the Act wherein he did not claim the set off of business loss of the current year against the income from other sources Rs.4,85,969/- and long term capital gain of Rs.26,816/-. During the assessment proceedings, the assessee filed a revised computation of income computing total income at Rs.58,21,500/- and while passing the order under section 143(3) the AO did not take into consideration the claim made in the revised computation by the assessee.
Aggrieved by the order of AO, the assessee preferred an appeal before the Ld. CIT(A) who also dismissed the appeal of the assessee by observing that AO has rightly passed the assessment order by not entertaining the claim which was not made in the original return of income ore revised return of income and the assessment was framed according to the ratio laid down by the Apex Court in the case of Goetz India Ltd. vs. CIT 284 ITR 323 (SC) wherein the Hon’ble Supreme Court has held that the assessee can not make the claim of deduction other than by filing a revised return of income.
After hearing both the parties and perusing the material on record, we observe that the assessee did not claim the set off of the business loss of Rs.68,35,770/- against the income of other heads namely long term capital gain of Rs.26,816/-
3 M/s. Ashok Kumar Ruia Radhakrishna Ramnarain Pvt. Ltd. and other sources of Rs.4,85,969/- as per the provision of section 71 of the Act. Therefore, the assessee filed a revised computation of income during the assessment proceedings claiming the set off which was not considered by the AO while framing the order. The Ld. CIT(A) also rejected the appeal of the assessee on the ground that the claim was not made by way of revised return and thus following the ratio in the case of Goetz India Ltd. vs. CIT (supra) dismissed the appeal of the assessee. Now the issue before us is whether the assessee is entitled to the set off of the said loss against the income which is admissible as per the provisions of section 71 of the Act , nonetheless the same was not made in the return filed under section 139(1) or by way of revised return under section 139(5) of the Act. After going through the relevant provisions of the Act and the decision in the case of Goetz India Ltd. vs. CIT (supra), we find that there is no bar in admitting the claim of the assessee by Ld. CIT(A) and other appellate authority ITAT and therefore appellate authorities are free to accept any additional claim which has not been made by way of original return filed or revised return before the AO provided the same is as per law and as per the provision of the Act. We also observe that the Hon’ble Supreme Court has held that the AO can not take cognize of any claim of deduction by the assessee during the assessment proceedings which is made otherwise then by way of revised return. However, the Hon’ble court has not put any bar on the appellate authorities in allowing any such claim which is as per the provision of the 4 M/s. Ashok Kumar Ruia Radhakrishna Ramnarain Pvt. Ltd. Act. Accordingly, we direct the AO to allow the set off of the loss against the current year income and allow the carried forward of the unabsorbed loss to the subsequent years.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 04.09.2018.