DCIT CIR 3, THANE vs. VASUDEVAN RANGARAJAN, THANE

None appeared on behalf of the assessee even though the notices were issued by RPAD on several occasions. Hence, we proceed to dispose of the appeal ex-parte, without the presence of the assessee.

We heard the ld. DR and perused the record. The assessee has derived salary income from M/s ACC Ltd. During the year under consideration, the assessee suffered a loss of Rs.25,24,716/- from share trading activities. In the return of income, the assessee set off of share trading loss against the salary income and accordingly computed the total income. It is pertinent to note that the Income tax provisions do not permit set off of share trading loss against salary income. However, in the assessment proceedings, the assessee accepted the mistake in claiming set off of loss from share trading activity against salary income. Accordingly, the AO completed the assessment disallowing the set off claimed by the assessee. The AO levied penalty of Rs.8,64,300/- by holding that the assessee has furnished inaccurate particulars of income by claiming set off of loss suffered in share trading activities against the salary income. The ld. CIT(A), however, deleted the addition by following the decision of Hon’ble Supreme Court rendered in the case of CIT vs. Reliance Petro products (2010) 322 ITR 158 (SC).

The ld. DR submitted that the decision rendered by the Hon’ble Supreme Court in the case of Reliance Petroproduct (supra) is not applicable to the facts of the present case. He submitted that the decision rendered by the Hon’ble Supreme Court in the case of Reliance Petroproudct (supra) shall be applicable in respect of deductions which are not sustainable in law. He submitted that the assessee, in the instant case, has claimed set off share trading loss against the salary income

We find merit in the contentions of the ld.DR that the decision rendered in the case of Reliance petro products Ltd (supra) may not be applicable to the facts of the present case. We have noticed that the Ld CIT(A) has granted relief by following the said decision. Accordingly, we are of the view that the decision has been rendered by the ld.CIT(A) under incorrect appreciation of law. Accordingly, we are of the view that this issue requires fresh examination at the end of the ld.CIT(A). Accordingly, we set aside the order of ld.CIT(A) and restore the matter to his file with a direction to adjudicate the same afresh after providing necessary opportunity of being heard to the assessee.

In the result, the appeal of the revenue is allowed for statistical purposes.

DR, ITAT, Mumbai concerned गधर्ा पधईर / Guard file. 6. आदेशधनुसधय/ BY ORDER,सहधमक ऩंजीकधय (Asstt.