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Income Tax Appellate Tribunal, DELHI BENCHES “SMC-1” : DELHI
Before: SHRI BHAVNESH SAINI & SHRI O.P. KANT
ORDER PER BHAVNESH SAINI, J.M.
This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-14, New Delhi, Dated 21.06.2018, for the A.Y. 2015-2016, challenging the Order of Ld. CIT(A) in not allowing the set-off of losses amounting to Rs.8,04,809/-.
2 ITA.No.1663/Del./2019 Shri Surjeet Dhall, Delhi.
Briefly the facts of the case are that assessee filed return of income declaring income at Rs.8,71,780/-. The case was selected for scrutiny for the reasons “Low profit from large value commodity exchange transaction. Large value sale of futures (derivative) in a recognized stock exchange reported in securities transaction tax return”. The A.O. noted that assessee filed requisite details before him. The assessee was engaged in the business and manufacturing of plastic items in the name of M/s. Simmi Plastic and he was also trading in shares and derivatives. The A.O. after discussion accepted the return of income.
The assessee challenged the assessment order before the Ld. CIT(A) and it was submitted that A.O. was not justified in not considering the business losses arising out of transactions in shares and derivatives claimed by way of revised computation filed before him. The written submissions of the assessee is reproduced in the appellate order in which the assessee briefly explained that assessee has earned profit of Rs.10,21,780/- from M/s. Simmi Plastic and had incurred loss of Rs.8,04,809/- on account
3 ITA.No.1663/Del./2019 Shri Surjeet Dhall, Delhi. of transactions entered into shares and derivatives. The entire loss so incurred was business loss which was inadvertently not claimed in the return of income filed originally which was liable to be set-off from the total taxable income under the provisions of Set-off and Carry Forward of losses. The assessee filed revised computation of income and details and documentary evidences before A.O. to satisfy that assessee suffered genuine business losses. The Ld. CIT(A) noted in the appellate order that assessee filed revised computation of income when the matter was taken-up for scrutiny. The assessee did not disclose transaction of dealing in derivatives and forward market and now the assessee claimed it to be an inadvertent error. The Ld. CIT(A) noted that assessee since original return was filed under section 139(1) of the I.T. Act and no revised return under section 139(5) have been filed, therefore, claim of assessee is not allowable. The appeal of assessee was accordingly dismissed.
4 ITA.No.1663/Del./2019 Shri Surjeet Dhall, Delhi. 4. We have heard the Learned Representatives of both the parties through video conferencing and perused the Orders of the authorities below.
Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that specific documents were filed before A.O. for claiming the set-off of the losses and the case was selected for scrutiny on account of assessee dealing in commodity exchange transaction. The assessee filed revised computation of income before A.O. and entire material was before him, therefore, claim of assessee should have been entertained by the A.O.
On the other hand Ld. D.R. relied upon the Orders of the authorities below and submitted that since no revised return is filed, therefore, claim of assessee was rightly rejected.
We have considered the rival submissions. The Hon’ble Delhi High Court in the case of Commissioner of Income Tax vs., Jai Parabolic Springs Ltd., [2008] 306 ITR
5 ITA.No.1663/Del./2019 Shri Surjeet Dhall, Delhi. 42 (Del.), considering the Judgment of Hon’ble Supreme Court in the case of Goetze (India) Ltd., vs., Commissioner of Income Tax [2006] 284 ITR 323 (SC), has held as under :
“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.”
7.1. In the present case it is an undisputed fact that assessee filed revised computation of income before A.O. along with documentary evidences to explain that he has suffered business losses arising out of transactions in shares and derivatives. The case was selected for scrutiny for specific reasons that there is low profit from large value commodity exchange transactions. When all the documentary evidences and details were filed before A.O, then the claim of assessee should have been considered as per Law. Further there is no prohibition on the power of the Ld. CIT(A) being First Appellate Authority to decide the claim of assessee as per Law which is based on the material
6 ITA.No.1663/Del./2019 Shri Surjeet Dhall, Delhi. already produced on record. In view of the above facts and in the light of Judgment of the Hon’ble Delhi High Court in the case of Commissioner of Income Tax vs., Jai Parabolic Springs Ltd., (supra), we set aside the Order of the Ld. CIT(A) and restore the matter in issue to the file of Ld. CIT(A) with a direction to re-decide the appeal of assessee on merits as to whether assessee has suffered genuine business losses arising out of the transactions in shares and derivatives claimed by way of revised computation of income filed before A.O. at assessment stage along with documentary evidences. The Ld. CIT(A) shall give reasonable, sufficient opportunity of being heard to the assessee as well as to the A.O.
In the result, appeal of the Assessee allowed for statistical purposes.