Appeal Details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 2654 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 1 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-08-2017
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
26-07-2017
Assessment Year
2008-2009
Appeal Filed On
15-07-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO. AY. APPELLANT RESPONDENT 1022/HYD/16 2008-09 PRAMOD KUMAR GOENKA, HYDERABAD [PAN: AEEPG8160M] THE INCOME TAX OFFICER, WARD-7(4), HYDERABAD 1023/HYD/16 2009-10 FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI V. SREEKAR, DR DATE OF HEARING : 30-08-2017 DATE OF PRONOUNCEMENT : 31-08-2017 O R D E R PER INTURI RAMA RAO, A.M. : THESE APPEALS FILED BY ASSESSEE ARE DIRECTED AGAINS T THE ORDER(S) OF THE LD. COMMISSIONER OF INCOME TAX (APPE ALS)-10, HYDERABAD, FOR THE AYS. 2008-09 & 2009-10 RESPECTIVEL Y. 2. SINCE COMMON ISSUES ARE INVOLVED IN BOTH OF THES E APPEALS, WE HAVE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER. FOR THE SAKE OF CONVENIENCE, ITA NO. 1022/HYD/2016 FOR T HE AY. 2008- 09 IS DISCUSSED IN DETAIL. 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BO TH ON FACTS AND IN LAW. I.T.A. NOS. 1022 & 1023/HYD/2016 :- 2 - : 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE ASSESSING OFFICER IN REJECTING THE APPLICATION FOR RECTIFICAT ION U/S. 154 OF THE I.T. ACT. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THERE IS A MISTAKE IN THE INTIMATION U/S. 143(1) OF THE I.T.ACT WHICH CAN BE RECTIFIED U/S. 154 OF THE I.T.ACT. 3. THE LEARNED CIT(A) OUGHT TO HAVE DIRECTED THE AS SESSING OFFICER TO RECTIFY THE INTIMATION U/S. 143(1) OF THE I.T.ACT A ND ALLOW THE CLAIM FOR LOSS FROM DERIVATIVES. 4. ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 4. BRIEFLY, FACTS OF THE CASE ARE THAT THE APPELLANT IS A N INDIVIDUAL, DERIVING INCOME UNDER THE HEAD BUSINESS . THE RETURN OF INCOME FOR THE AY. 2008-09 WAS FILED ON 23-09-200 8 ADMITTING AN INCOME OF RS. 5,29,073/-. IN THE SAID RETURN OF INCOME, THE APPELLANT ALSO CLAIMED CARRY FORWARD LOSS INCURRED F ROM DERIVATIVES OF RS. 14,49,302/-. THE SAID RETURN OF INCOME WAS P ROCESSED U/S. 143(1) OF THE INCOME TAX ACT [ACT], ACCEPTING THE RETUR NED INCOME. AFTER RECEIPT OF THE INTIMATION, THE APPELLANT FILED AN AP PLICATION FOR RECTIFICATION U/S. 154 OF THE ACT PRAYING THAT THE LOSS D ERIVED FROM THE DERIVATIVES SHOULD BE SET OFF AGAINST BUSINESS INCO ME AS IT IS CLARIFIED VIDE PROVISIONS OF SECTION 43(5) OF THE ACT THAT THE LOSS FROM THE DERIVATIVES DOES NOT REPRESENT SPECULATIVE LOS S. THOUGH THIS CLAIM WAS NOT MADE IN THE RETURN OF INCOME, THE CL AIM FOR SET OFF WAS NOT MADE IN THE RETURN OF INCOME. IT IS SUBMITT ED THAT THIS MISTAKE IS GLARING FROM THE MERE READING OF THE RELEVA NT PROVISIONS OF THE ACT. THE SAID PETITION WAS REJECTED BY THE AO AN D BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE CIT(A) . THE LD.CIT(A) PLACING RELIANCE ON THE ORDER OF THE HON'BLE KERALA H IGH COURT IN THE CASE OF M. FAR HOTELS LTD., VS. CIT [361 ITR 442] HELD THAT A NEW CLAIM CANNOT BE ENTERTAINED IN THE PROCEEDINGS U/ S. 154 I.T.A. NOS. 1022 & 1023/HYD/2016 :- 3 - : AGAINST THE INTIMATION ISSUED AND DISMISSED THE APPEAL. BEING AGGRIEVED, THE APPELLANT IS BEFORE US IN THE PRESENT AP PEAL. 5. IT IS VEHEMENTLY CONTENDED ON BEHALF OF THE ASSESSE E THAT FACTS RELATING TO THE LOSS DERIVED FROM THE DERIVATIVES IS ALREADY ON RECORD AND PART OF RETURN OF INCOME. IT IS ONLY THE ASS ESSEE, CLAIM HAD OMITTED TO SET OFF THE LOSS ALREADY DETERMINED AGAIN ST THE PROFITS RETURNED. THUS, SINCE THE SET OFF WAS ELIGIBL E HAVING REGARD TO THE PLAIN PROVISIONS OF THE ACT, THE LD.AO AS WELL AS THE CIT(A) OUGHT TO HAVE ALLOWED THE CLAIM FOR SET OFF OF LOSS FRO M DERIVATIVES AGAINST THE BUSINESS INCOME. 6. ON THE OTHER HAND, THE LD.CIT-DR PLACED RELIANCE O N THE ORDER OF THE LOWER AUTHORITIES AND JUDGMENT OF HON'BLE KERALA HIGH COURT IN THE CASE OF M. FAR HOTELS LTD., VS. CIT (SUPRA ). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THIS APPEAL IS WHETH ER THE PETITION FILED UNDER THE PROVISIONS OF SECTION 154 IS MAINTAINA BLE SEEKING AMENDMENT TO THE INTIMATION ALREADY ISSUED U/S. 143(1). THEREFORE, IT IS APT TO REPRODUCE THE PROVISIONS OF SE CTION 143(1) AS THEY STOOD AT THE RELEVANT POINT OF TIME. 143. (1) WHERE A RETURN HAS BEEN MADE UNDER SECTIO N 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTION 142, SUCH RETURN S HALL BE PROCESSED IN THE FOLLOWING MANNER, NAMELY: ( A ) THE TOTAL INCOME OR LOSS SHALL BE COMPUTED AFTER MAKING THE FOLLOWING ADJUSTMENTS, NAMELY: ( I ) ANY ARITHMETICAL ERROR IN THE RETURN; 74 [***] ( II ) AN INCORRECT CLAIM, IF SUCH INCORRECT CLAIM IS AP PARENT FROM ANY INFORMATION IN THE RETURN; I.T.A. NOS. 1022 & 1023/HYD/2016 :- 4 - : (III) ( B ) THE TAX 76 [ AND INTEREST ], IF ANY, SHALL BE COMPUTED ON THE BASIS OF THE TO TAL INCOME COMPUTED UNDER CLAUSE ( A ); ( C ) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DUE T O, THE ASSESSEE SHALL BE DETERMINED AFTER ADJUSTMENT OF THE TAX 76 [ AND INTEREST ], IF ANY, COMPUTED UNDER CLAUSE ( B ) BY ANY TAX DEDUCTED AT SOURCE, ANY TAX COLLECTED AT SOURCE, ANY ADVANCE TAX PAID, ANY RELIEF ALLOWABLE UNDER AN AGREEMENT U NDER SECTION 90 OR SECTION 90A, OR ANY RELIEF ALLOWABLE UNDER SECTION 91, ANY REBAT E ALLOWABLE UNDER PART A OF CHAPTER VIII, ANY TAX PAID ON SELF-ASSESSMENT AND A NY AMOUNT PAID OTHERWISE BY WAY OF TAX 77 [ OR INTEREST ]; ( D ) AN INTIMATION SHALL BE PREPARED OR GENERATED AND SENT TO THE ASSESSEE SPECIFYING THE SUM DETERMINED TO BE PAYABLE BY, OR THE AMOUNT OF R EFUND DUE TO, THE ASSESSEE UNDER CLAUSE ( C ); AND ( E ) THE AMOUNT OF REFUND DUE TO THE ASSESSEE IN PURSU ANCE OF THE DETERMINATION UNDER CLAUSE ( C ) SHALL BE GRANTED TO THE ASSESSEE: PROVIDED THAT AN INTIMATION SHALL ALSO BE SENT TO T HE ASSESSEE IN A CASE WHERE THE LOSS DECLARED IN THE RETURN BY THE ASSESSEE IS ADJUSTED BUT NO TAX 77 [ OR INTEREST ] IS PAYABLE BY, OR NO REFUND IS DUE TO, HIM: PROVIDED FURTHER THAT NO INTIMATION UNDER THIS SUB- SECTION SHALL BE SENT AFTER THE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHIC H THE RETURN IS MADE. EXPLANATION. FOR THE PURPOSES OF THIS SUB-SECTION, ( A ) 'AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE RETURN' SHALL MEAN A CLAIM, ON THE BASIS OF AN ENTRY, IN THE RETURN, ( I ) OF AN ITEM, WHICH IS INCONSISTENT WITH ANOTHER EN TRY OF THE SAME OR SOME OTHER ITEM IN SUCH RETURN; ( II ) IN RESPECT OF WHICH THE INFORMATION REQUIRED TO B E FURNISHED UNDER THIS ACT TO SUBSTANTIATE SUCH ENTRY HAS NOT BEEN SO FURNISHED; OR ( III ) IN RESPECT OF A DEDUCTION, WHERE SUCH DEDUCTION E XCEEDS SPECIFIED STATUTORY LIMIT WHICH MAY HAVE BEEN EXPRESSED AS MONETARY AMO UNT OR PERCENTAGE OR RATIO OR FRACTION; ( B ) THE ACKNOWLEDGEMENT OF THE RETURN SHALL BE DEEMED TO BE THE INTIMATION IN A CASE WHERE NO SUM IS PAYABLE BY, OR REFUNDABLE TO, THE A SSESSEE UNDER CLAUSE ( C ), AND WHERE NO ADJUSTMENT HAS BEEN MADE UNDER CLAUSE ( A ). 7.1. FROM THE BARE READING OF THE ABOVE PROVISIONS, IT IS MANIFEST THAT UNDER THE PROVISIONS OF SECTION 143(1), AN INTIMATI ON CAN BE SENT ONLY AFTER MAKING THE FOLLOWING ADJUSTMENTS ALONE: I.T.A. NOS. 1022 & 1023/HYD/2016 :- 5 - : (I) ANY ARITHMETICAL ERROR IN THE RETURN; (II) AN INCORRECT CLAIM AND INTIMATION SHALL BE PRE PARED AND SENT TO ASSESSEE SPECIFYING THE AMOUNT PAYABLE AMOU NT, REFUNDABLE DUE TO ASSESSEE AFTER MAKING THE ABOVE ADJUSTMENT , IF ANY. 7.2. THUS, THE PROVISIONS OF SECTION 143(1) DOES NOT E MPOWER THE DEPARTMENT TO ENTERTAIN A NEW CLAIM WHICH WAS NOT MADE IN THE RETURN OF INCOME. THEREFORE, THE PETITION U/S. 154 AGAI NST INTIMATION U/S. 143(1) CAN BE ENTERTAINED ONLY IF THER E IS ANY APPARENT MISTAKE IN THE INTIMATION U/S. 143(1), SINCE NO APPARENT MISTAKE WAS POINTED OUT IN THE INTIMATION ON ACCOUNT OF TH E MISTAKES OF THE DEPARTMENT, THE RECOURSE TO THE SECTION 1 54 IS NOT AVAILABLE TO CORRECT ASSESSEES OWN MISTAKES IN THE RETU RN OF INCOME. IN THE LIGHT OF RATIO LAID DOWN BY THE HON'BL E KERALA HIGH COURT IN THE CASE OF M. FAR HOTELS LTD., VS. CIT (SUPRA ), WE DO NOT FIND ANY FALLACY IN THE REASON OF LD.CIT(A). 8. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2017 SD/- SD/- (D. MANMOHAN) (INTURI RAMA RAO) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 31 ST AUGUST, 2017 TNMM I.T.A. NOS. 1022 & 1023/HYD/2016 :- 6 - : COPY TO : 1. PRAMOD KUMAR GOENKA, C/O. SRI S. RAMA RAO, ADVOC ATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREET NO .9, HIMAYAT NAGAR, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-7(4), HYDERABAD. 3. CIT (APPEALS)-10, HYDERABAD. 4. CIT(IT &TP), HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.
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