ADITYA RAMSINGH AGARWAL,MUMBAI V. DCIT, CIRCLE 17(1), BANDRA

ITA 477/MUM/2025

AI Insights

The case involves Aditya Ramsingh Agarwal, who appealed against the order of the Commissioner of Income Tax (Appeals) concerning the assessment of his income for the year 2018-19. The primary contention was the non-consideration of losses from derivative transactions amounting to INR 95,89,70,731, which were not accounted for in the intimation under section 143(1) of the Income Tax Act, 1961. The Tribunal noted that the issue raised by the assessee did not originate from the assessment order under section 143(3) but from the earlier intimation under section 143(1), which was not subject to the current appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714553 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Period of limitation; Time period of passing order
• Section: 143(3); 154

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.477/MUM/2025 (Assessment Year : 2018-19) Aditya Ramsingh Agarwal, 226, Bussa Industrial Premises, Century Bazaar Line, Mumbai - 400025 PAN : AAAPA8348P ............... Appellant v/s Deputy Commissioner of Income Tax, Circle – 17(1) Kautilya Bhavan, Bandra Mumbai-400051 ……………… Respondent Assessee by : None Revenue by : Shri Rajesh Kumar Yadav, CIT-DR Date of Hearing – 30/07/2025 Date of Order - 04/08/2025 O R D E R PER SANDEEP SINGH KARHAIL, J.M. 1. The assessee has filed the present appeal against the impugned order dated 02/09/2024, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], which in turn arose from the assessment order passed under section 143(3) of the Act, for the assessment year 2018-19. 2. When the present appeal was called for hearing neither anyone appeared on behalf of the assessee, nor was any application seeking adjournment filed. Printed from counselvise.com ITA No.477/Mum/2025 (A.Y. 2018-19) 2 Accordingly, we proceed to decide the present appeal on the basis of the material available on record and after hearing the submissions of the learned Departmental Representative. 3. The present appeal is delayed by 54 days. Along with the appeal, the assessee has filed an application seeking condonation of delay. According to the assessee, he had appointed a dedicated staff to handle the litigation/compliance matters related to Income Tax, and he was completely dependent on them for all ongoing litigation matters. The assessee submitted that in October 2024, the said employee suddenly left due to his family emergencies without handing over his pending work to anybody in the office. Accordingly, when another consultant was appointed in January 2025, for litigation/compliance matters, he informed the assessee about the order passed by the learned CIT(A) for the year under consideration, dismissing the assessee’s appeal. As there was a lack of communication about the order passed by the learned CIT(A), the present appeal could not be filed within the limitation period. Having considered the submissions of the assessee, we are of the considered view that there was sufficient cause which prevented the assessee from filing the present appeal within the limitation period. Accordingly, we condone the delay and proceed to decide the present appeal on the merits. 4. In this appeal, the assessee has raised the following grounds: – “The Assessee prefers an appeal against an appellate order dated 02/09/2024 passed by the National Faceless Appeal Centre (NFAC), Delhi on following amongst other grounds, each of which is without prejudice to any others: 1. The appellant submits that there is delay in filing the appeal by 83 days. The delay in filing of the appeal of 83 days was due to circumstances beyond the control of the Printed from counselvise.com ITA No.477/Mum/2025 (A.Y. 2018-19) 3 appellant. The appellant makes a respectful prayer to your honour to condone the delay of 83 days in filing the appeal and decide the grounds on merits. 2. On the facts and circumstances of the case and in law, the Learned CIT(A) erred in confirming the Assessment completed at Rs. 21,02,29,680/- being the income computed as per order u/s. 143(1) of the Income Tax Act, 1961 without considering the facts of the case that the losses from derivative transactions of Rs. 95,89,70,731/- has not been considered while passing the order u/s. 143(1) of the Income tax act, 1961. 3. On the facts and circumstances of the case and in law, the Learned CIT(A) failed to appreciate the fact that, rectification filed by the appellant against 143(1) was rejected due to proceedings u/s. 143(3) was started by issuing notice u/s. 143(2) before intimation u/s. 143(1) and Ld. AO has to compute the income based on submissions during assessment proceedings and not as per intimation w/s. 143(1) of the Act. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate the fact that, all the documents regarding derivative transactions were presented before Ld. AO as case was selected under CASS which includes one of the issue was \"Securities (Derivative) Transaction\" and Ld. AO accepted the same. 5. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in confirming that the losses from derivative transactions are not business losses, hence the same would not been allowed to set off against the other incomes of the appellant.” 5. We have considered the submissions of learned DR and perused the material available on record. The brief facts of the case are that the assessee is an individual, and for the year under consideration, filed his return of income on 30/10/2018, declaring a total loss of INR 74,87,41,048. The return filed by the assessee was processed vide intimation dated 09/02/2020 issued under section 143(1) of the Act, determining the total income at INR 21,02,29,683. Subsequently, the return filed by the assessee was selected for scrutiny and vide order dated 25/04/2021 passed under section 143(3) read with section 144B of the Act, the total income of the assessee was assessed at INR 21,02,29,680. In his appeal before the learned CIT(A), the assessee raised grounds challenging the adjustment made by the AO–CPC under section 143(1) of the Act, whereby losses from derivative transactions of INR 75,42,18,638 were not considered while passing the intimation under section 143(1) of the Act. The learned CIT(A), vide impugned order, dismissed the appeal filed by Printed from counselvise.com ITA No.477/Mum/2025 (A.Y. 2018-19) 4 the assessee on the basis that the assessment order under section 143(3) of the Act was passed without making any addition and the addition which has been challenged by the assessee was actually made in the intimation issued under section 143(1) of the Act, and therefore, the issue does not emanate from the assessment order passed under section 143(3) of the Act against which the assessee has filed the appeal. The relevant findings of the learned CIT(A), vide impugned order, are reproduced as follows: – “8. Ground no. 1, 2 & 3 are related to the assessed income determined of Rs. 21,02,29,680/- instead of loss of Rs. 74,87,41,048/- as claimed by the appellant in return of income. The appellant has raised the following issues: (i) The AO has erred in completing the assessment at Rs. 21,02.29,680/-being the income computed as per order u/s. 143(1) of the Income Tax Act, 1961 without considering the facts of the case that the losses from derivative transaction of Rs. 75,42,18,638/- has not been considered while passing the order u/s. 143(1) of the Income tax act, 1961. (ii) The AO has erred in not considering the losses from derivative transactions as business losses, hence the same would not been allowed to set off against the other incomes of the appellant. (iii) The AO has not considered the documents submitted for the losses incurred from derivative transactions while completing the assessment u/s. 143(3) of the Income Tax Act, 1961. 8.1 The issues raised by the appellant have been perused. The appellant had filed return of income declaring total income at loss of Rs. 74,87,41,048/-. The CPC while processing the return of income u/s 143(1) of the Act determined the total income of the appellant at Rs.21,02,29,680/-. The reason of difference in income declared by the appellant in the return of income and income determined by CPC i.e. variance is as under: Printed from counselvise.com ITA No.477/Mum/2025 (A.Y. 2018-19) 5 8.2 The appellant had claimed that during the year under consideration that occurred derivative loss of Rs. 95,89,70,731/- however at time of filing of return of income he wrongly filled the losses from derivative under the head \"Other Income\" in negative amount instead of \"Other Expenses/Direct Expenses\". Which resulted in the total income at Rs. 21,02,29,680/-. The appellant has submitted that the AO has not considered the documents submitted for the losses incurred from derivative transactions, however the appellant is silent on what documentary evidences were furnished before the AO. Even during the appellate proceedings no such details related to the derivative loss has been furnished by the appellant. The appellant has not furnished any documentary evidences or statement to reach at how such loss has occurred by him 8.3 Further, perusal of the assessment order reveals that the assessment proceedings u/s 143(3) of the Act were finalized without making any addition. The addition was actually made in the order u/s 143(1) of the Act. Therefore, the issue does not emanate from the assessment order u/s 143(3) of the Act dated 25.04.2021 against which the appeal has been filed. The appeal on this ground is not maintainable. The ground no.1,2 & 3 are therefore infructuous and hence dismissed.” 6. Being aggrieved by the order passed by the learned CIT(A), the assessee is in appeal before us. 7. From the perusal of the record, we find that against the intimation issued under section 143(1) of the Act, the assessee filed the rectification application on 21/04/2020, which forms part of the paper book-1 from pages 30-31 on the issue of non-consideration of derivative loss while calculating the income of the assessee. The said rectification application was rejected by the AO–CPC vide its order dated 08/04/2025, which forms part of the paper book – 2 on pages 9-11. From the perusal of documents placed on record by the assessee in his paper book-2, we find that the assessee has not only filed the appeal before the learned CIT(A) against the intimation issued under section 143(1) of the Act on 01/04/2025 having acknowledgement No. 92392876001045, but also filed the appeal before the learned CIT(A) against the order passed under section 154 of the Act on 14/04/2025 having acknowledgement No. 934062530140425. Therefore, from the perusal of documents placed on Printed from counselvise.com ITA No.477/Mum/2025 (A.Y. 2018-19) 6 record, it is evident that the assessee has already taken necessary steps against the issue of non-consideration of derivative loss while computing his income. 8. Despite filing two paper books, the assessee has not placed any material on record to show that the issue of derivative loss was examined by the AO during scrutiny assessment proceedings. Thus, ostensibly, the scrutiny assessment order passed under section 143(3) read with section 144B of the Act did not examine this issue of derivative loss. Therefore, we do not find any infirmity in the order passed by the learned CIT(A) in rejecting the assessee’s appeal, as this issue does not emanate from the assessment order which resulted in the present appellate proceedings. As on this issue, there was no merger of the intimation issued under section 143(1) of the Act and scrutiny assessment order passed under section 143(3) of the Act, the impugned order passed by the learned CIT(A) is upheld. Accordingly, the grounds raised by the assessee are dismissed. 9. In the result, the appeal by the assessee is dismissed. Order pronounced in the open Court on 04/08/2025 Sd/- OM PRAKASH KANT ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 04/08/2025 Prabhat Printed from counselvise.com ITA No.477/Mum/2025 (A.Y. 2018-19) 7 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "