BRAHMA INVESTMENTS I LIMITED,CYPRUS vs. DCIT CIRCLE INT TAX 1(1)(2), NEW DELHI

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ITA 697/DEL/2023Status: DisposedITAT Delhi26 December 2023AY 2020-21Bench: Dr. B. R. R. Kumar, Accountant Member Ms. Astha Chandra (Judicial Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CPC erred in processing the return under section 143(1) by making an incorrect adjustment to the capital loss and failing to issue an intimation. The case was remanded to the AO for rectification of the mistake.

What were the facts?

The assessee, a Cyprus tax resident, claimed a long-term capital loss on the sale of Indian company shares. The CPC processed the return under section 143(1) and incorrectly determined a long-term capital gain significantly higher than the claimed loss, without issuing an intimation for the adjustment.

What were the issues?

Whether the CPC erred in processing the return under section 143(1) by making an incorrect adjustment to the capital loss and failing to issue an intimation. Whether the CIT(A) erred in referring the case back to the AO.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 250,Section 251

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Before: Dr. B. R. R. KumarMs. Astha Chandra

Hearing: 21.12.2023Pronounced: 26.12.2023

ORDER

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by assessee against the order of ld. CIT(A)-42, New Delhi dated 17.01.2023.

2.

Following grounds have been raised by the assessee:

“1. That on the facts and circumstances of the case and in law, the order passed by the Ld. CIT(A) under section 250 of the Act is bad in law/ void-ab-initio and liable to be quashed.

2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in referring back the case to the file of the Assistant Director of Income Tax, Centralized Processing Centre, Bengaluru (‘Learned Assessing Officer’ or ‘Ld. AO’) and the above action of the Ld. CIT(A) is contrary to section 251 of the Act.

3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not giving specific directions Brahma Investments I Ltd. for restricting the returned capital loss of INR 2,55,84,80,960 despite noting the apparent error in the Intimation passed by the Ld. AO under section 143(1) of the Act.”

3.

The assessee is a tax resident in Cyprus filed return of income on 15.02.2021 and declaring total income of Rs.1,13,33,890/-. The assessee has also claimed a long term capital loss of Rs.255,84,80,890/- computed on sale of shares of Indian company. The said long term capital loss was not carried forward by the assessee to subsequent years as the long term capital gains is exempt from taxation in India as per Article 13 of the DTAA.

4.

The CPC processed the return u/s 143(1) of the Income Tax Act, 1961 determining the long term capital gains of Rs.511,69,61,920/- against the long term capital loss claimed by the assessee of Rs.255,84,80,890/- (surprisingly double than the LTCL).

5.

Notwithstanding, the CPC has also erred in not following the provisions of Section 143(1)(a) of the Income Tax Act, 1961 as no intimation has been issued to the assessee for such adjustment either in writing or in electronic mode. The ld. CIT(A) has also confirmed this fact.

6.

Both the parties have fairly agreed that the issue can be remanded to the file of the AO for rectification of the mistake in the “order giving effect to the directions of the ITAT”. Hence, we direct the JAO to correct the error and also provide revised computation of income sheet to the assessee within 90 days from the date of this order.

Brahma Investments I Ltd. 7. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 26/12/2023.

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